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.”
Their going after the landlords for price fixing maybe look into realtors and their agencies for home price fixing
Donna, Lease rates and home prices are all factors of the simple economics of supply and demand. Landlords and Realtors don’t control what tenants and buyers pay for rentals and homes. If supply exceeds demand then prices go down. Rental prices have been declining slightly because we have been in a building boom of apartments for several years. More apartments are being built than there are tenants to fill them. This creates competition between landlords. They lower their rents to attract tenants to keep their apartments full. The same goes with homes. Many homeowners have decided to wait to sell and buy because of the higher interest rates. They may have a 3% rate on their current home mortgage and are reluctant to sell their home because they would have to pay 7% to buy another home. This has created a shortage of homes available in several price ranges and areas. Especially in the “affordable” price ranges and areas. When demand exceeds what is available, the home prices tend to go up. Sellers decide they can get more for their homes because there is not as much available. Buyers then compete against each other for the homes that are available and prices go up. It is not “price fixing”.
Indeed
This here is a good analysis of what is happening in the market right now.