Two new data reports have determined home prices are continuing to rise while rental housing costs are still in decline.
Redfin (NASDAQ: RDFN) reported home prices rose from one year earlier in December across all 50 of the most populous metropolitan areas – the first time that has occurred since May 2022. By comparison, home prices rose in 41 metros in December 2023.
Last month, home prices posted their biggest gain in nearly a year, jumping 6.3% year-over-year to a median $427,670. Cleveland recorded the highest median home sale price spike at 15%, followed by Milwaukee (14.5%), Philadelphia (14%), Miami (11.8%) and Chicago (11.1%).
“Places that have long been known as affordable places to live, like Cleveland and Milwaukee, are now seeing double-digit price increases—and that’s after home prices skyrocketed during the pandemic,” said Redfin Senior Economist Elijah de la Campa. “Affordable housing havens have become harder and harder to come by; even places that saw some price relief last year, like Texas and Florida, are now seeing prices tick back up. Many people looking to move this year will likely opt to rent because it’s the more affordable option and rental affordability is expected to improve as more supply comes on the market.”
Separately, Realtor.com reported rents declined for the 17th consecutive month during December, with a 1.1% year-over-year drop to a median of $1,695. This marked the first time since April 2022 where the national median asking rent was below $1,700, which Realtor.com attributed to new construction outpacing demand.
“We are reaping the benefits of the multi-family surge in housing starts that lasted throughout 2023, but as starts and completions slow we anticipate seeing more balance in the rental market ahead,” said Danielle Hale, chief economist at Realtor.com. “For renters, balance is welcome and signals an end to the pandemic era rental market spikes.”
