Rent prices are easing in most American cities thanks to a boost in available units. Sixty-eight of the country’s largest metros saw month-over-month rent declines in October, according to researchers at Florida Atlantic University and two other schools. The average rental rate was $2,040, down 0.9% from September. Springfield, MA, Austin, TX, Seattle, and New York were among the cities where rents posted declines. “It seems that an increase in supply helped relieve the pricing pressure on rental units around the country – and that’s exactly what had to happen,” said Ken H. Johnson, Ph.D., an economist in FAU’s College of Business. He noted that delivery of units under construction, as well as increasing unit density and conversions of short-term…
Rent growth decelerated for the fifth straight month, but renters in lower-priced units are still feeling the squeeze as homeownership remains out of reach for most Americans. Single-family rents increased only 10.2% YOY in September, down from 13.9% in April 2022, according to recent data from CoreLogic. This is still double the pre-pandemic growth rate, but moving in the right direction. “High mortgage interest rates may be causing potential homebuyers to hit pause and remain renters, keeping pressure on rent prices. However, the monthly rent change was negative in September, resuming the typical seasonal pattern for the first time since 2019, which could signal the beginning of rent price growth normalization,” said Molly Boesel, principal economist at CoreLogic. Declining rents…
Home prices have peaked in a growing number of overpriced housing markets as sellers and buyers pull back in the face of rising interest rates and affordability challenges. Researchers at Florida Atlantic University and Florida International University analyzed the 100 most overvalued housing markets by looking at their premiums, the percentage above the long-term pricing trend that buyers must pay on a property. The larger the premium, the more overpriced the market. In July, they found that premiums fell in 27 markets. Of those, 22 also saw home prices fall. Most of these markets are west of the Mississippi River. This is a significant increase from June when premiums declined in 12 markets and prices fell in only seven. FAU’s…
Mortgage rates tanked last week, dropping from an average 5.70% to 5.30%, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 5.30%. A year ago at this time, the 30-year FRM averaged 2.90%. “Over the last two weeks, the 30-year fixed-rate mortgage dropped by half a percent, as concerns about a potential recession continue to rise,” said Sam Khater, Freddie Mac’s Chief Economist. “While the drop provides minor relief to buyers, the housing market will continue to normalize if home price growth materially slows due to the combination of low housing affordability and an expected economic slowdown.” Potential buyers are backing away from the market due to the soaring cost of purchasing…
