Does Rent Always Go Up? What 45 Years of Data Tells Us
There's one dataset I think every residential real estate investor should be familiar with: historical rent values. If you want to dig into it yourself, check it out here: BLS Survey Output
It's collected by the US Bureau of Labor, and it's based on a sample survey - meaning people reporting on their own rental expenses. So it's not super accurate (unlike the House Price Index, which is based on detailed recordings of every transaction). And because the data is more sparse, we only have it at the US country level - no state, county, or city breakdowns. But it's the best we have. And it's fascinating.
Rent Has Gone Up Every Single Year Since 1980
If you filter that BLS report from 1980 to today, you'll find that in the past 45+ years, rent has gone up year-over-year - every single year, without exception.
Comparing US Rent Price Index (https://data.bls.gov/timeseries/CUUR0000SEHA) and US House Price Index (https://fred.stlouisfed.org/series/USSTHPI) - both YoY value incfrease (thin lines) and 20yr window ROI (think lines) between 1980 and 2025
(Worth noting: the data actually goes back further, and if anything, the rent growth trend was even stronger in the decades before 1980. I chose to focus on 1980 onward since that's the house price data window I'm working with - and frankly, these are the years our generation actually lived through)
I was genuinely surprised when I first discovered this, because I know for a fact that house prices don't always go up year-over-year (you can see that data here). And I also know rent prices generally correlate with house prices. So... what's going on?
One more lens worth looking at before we dig in: if you zoom out to a 20-year rolling window (also shown in the graph), both rent and house prices are always positive - no exceptions. House prices actually grow faster over the long run, with rent coming in at roughly 85-88% of that growth rate. But here's the flip side: rent is far more stable year-to-year, as you can see from the smoother line. For a long-term investor, both data points tell the same story - time is your friend.
What Happened During the 2007-2012 Crisis?
I decided to take a closer look at the last major house price crisis we've seen - the subprime mortgage crisis that played out between 2007 and 2012.
When you look at the nationwide data during those years, you can see that between Q1 2007 and Q1 2012, the average US house price dropped from a CPI of 380.26 to 309.52 - a 19% decline. And that's the national average. Specific areas were hit way harder: Nevada saw a 55% drop, California around 40%. Some states held up much better - Tennessee only dropped about 6%, which is actually one of the main reasons I was drawn to investing there in 2017.
But here's what blew my mind: during that same period, the nationwide average rent went up every single year. It climbed from a rent price index of 230.8 in January 2007 to 257.5 in January 2012 - an 11.6% increase - while house prices were cratering.
Comparing US Rent Price Index (https://data.bls.gov/timeseries/CUUR0000SEHA) and US House Price Index (https://fred.stlouisfed.org/series/USSTHPI) Year over Year Growth data between 2006 and 2015, including the through the 2008-2009 financial crisis.
So how do you explain that? Here's my take:
When the crisis hit, many homeowners found themselves owing more on their mortgage than their house was actually worth. A homeowner in Las Vegas watching their home value drop 55% while still carrying the full loan balance - it just didn't make financial sense to keep paying. So a lot of people handed the keys back to the bank and walked away.
That created two things at once:
Banks ended up owning a ton of houses. But they're not professional real estate investors - they don't know how to sell quickly. And they were smart enough to realize that dumping everything on the market at once would tank values even further. So they sold slowly, dripping inventory back into the market over time.
All those former homeowners still needed somewhere to live. They became renters.
So inventory went down while rental demand went up - and rent prices kept climbing, even during one of the worst financial crises in modern history.
What Are the Takeaways?
Your cash flow should get better over time
When you own a rental property, you've got a lot of ongoing expenses - mortgage, taxes, insurance, maintenance, property management. But the mortgage (principal and interest) is by far the biggest one, usually around 75% of your monthly costs. And here's the thing: on a fixed-rate mortgage, that number never changes.
Your income, on the other hand, is rent - which, as we've just established, tends to go up over time. So your biggest expense is fixed while your main income source grows. That should naturally lead to improving returns the longer you hold.
If prices drop and you can afford to wait - don't sell
I know it's hard to stay calm when your asset value is declining. But year/year drops in real estate value are actually pretty rare - the US house price index had a year/year drop only 7 times in the past 70 years. And when it does happen, your rental income keeps coming in while you wait for the market to recover.
That's the key difference between a distressed homeowner and a prepared investor. The homeowner was stuck paying a mortgage on a property worth far less than the debt, with no income to offset it. The investor can take a breath, keep covering expenses with steady rental income, and wait for the market to correct - because it always has.
Markets fluctuate. Rent grows. The short term is noisy - the long term tells a very different story.
