Rent CAGR Calculator: Annualized Rent Growth Over Years
Work out the annualized growth rate of rent over multiple years — the trend that single-year rent-increase numbers miss, and a key input to the buy-versus-rent decision.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Annual rent growth | Total rent growth |
|---|---|---|
| $1,500 to $2,000 over 4yr | 7.46% | 33.33% |
| $1,200 to $1,400 over 3yr | 5.27% | 16.67% |
| $2,500 to $4,000 over 5yr (boom metro) | 9.86% | 60.00% |
| $900 to $1,000 over 4yr (slow market) | 2.67% | 11.11% |
How This Calculator Works
Enter the starting and ending monthly rent and the years between them. The calculator finds the compound annual growth rate that connects the two figures. Compare it against your income growth to see whether rent is consuming a growing share of your budget.
The Formula
Compound Annual Growth Rate
Start is the beginning value, End is the ending value, n is the number of years
Worked Example
Rent rising from $1,500 to $2,000 over 4 years is a 7.5% annual growth rate, total 33%. If income grew only 3% annually over the same period, rent consumed a steadily larger share of the budget — the squeeze that drives many renters toward buying or relocating. US rent growth averaged 3% to 5% historically but spiked to 10%+ in many metros during 2021-2022.
Key Insight
Rent CAGR is the renter's version of the homeowner's appreciation rate — and it's the strongest argument for buying when rent growth outpaces mortgage cost. If rent grows 7% annually while a fixed mortgage payment stays flat, the buy-versus-rent math tilts toward buying within a few years even at today's higher mortgage rates. The single-year rent increase hides this; the multi-year CAGR exposes it.
Frequently Asked Questions
How is rent CAGR calculated?
(Ending rent / starting rent) ^ (1/years) − 1. From $1,500 to $2,000 over 4 years is about 7.5% per year.
How does this differ from a rent increase?
A rent increase measures one year's change. CAGR measures the steady annual rate across multiple years, smoothing out lumpy increases. CAGR is the right tool for projecting future rent and for buy-vs-rent analysis over a multi-year horizon.
What's a typical rent growth rate?
US long-run average: 3% to 5% annually. Sharp spikes during housing shortages — many metros saw 10% to 20% in 2021-2022. High-growth Sun Belt cities have run consistently above national average; rent-controlled and slow-growth markets below.
How does this affect buy-vs-rent?
Higher rent CAGR strengthens the case to buy. A fixed mortgage payment stays flat while rent compounds — if rent grows 7% annually, the renter pays steadily more while a buyer's principal-and-interest stays constant. The crossover point where buying wins comes faster with higher rent growth.
Should I expect this rate to continue?
Use recent CAGR for near-term budgeting but expect mean reversion over longer horizons. Double-digit pandemic-era rent growth won't continue indefinitely; long-run averages (3% to 5%) are a more defensible assumption for 5+ year projections.
Related Calculators
Data Sources & Benchmarks
This calculator draws on 1 independent, dated source.
Methodology & Review
The growth rate is the compound annual rate between rent at the start and end of the period. Unlike a single rent increase (one year), CAGR captures the multi-year trend — useful for projecting future rent and comparing against income growth or a buy-vs-rent decision.
Written by Ugo Candido · Last updated May 17, 2026.