Rents for single-family homes have been on a slight downward trend recently. In August, rents grew only 1.4% compared to last year. This marks a drop from a 2.3% rise in July and is the smallest increase we’ve seen in 15 years.
What’s interesting is that this slowdown reflects a broader trend across the country. Initially, rent prices were climbing in the first half of the year, but they’ve slowed down significantly since.
Regionally, though, the story changes. In Chicago, rents jumped by 4.7% in August, the highest among major cities. Los Angeles followed at 2.8%, and Philadelphia at 2.7%. Meanwhile, Dallas experienced a decline of 0.6%. This drop in Dallas is largely due to an influx of new apartments making up the market, leading to more supply than demand.
Molly Boesel, a senior economist at Cotality, highlighted the contrasts in growth rates. She pointed out that even as national trends cool, local factors like housing supply and regional economies still shape rent prices. For instance, Los Angeles is approaching its pre-wildfire rent levels, demonstrating how recovery and local conditions play a role.
High-end rental properties are doing relatively well, with a 1.6% increase in rents. In contrast, low-end properties saw a smaller rise of 1.1%. Both of these figures are below last year’s growth rates.
The multifamily apartment market is also experiencing a slowdown. A construction boom led to a record number of new apartments, which are now available. According to Apartment List, national apartment rents were down 0.8% in September compared to last year. Interestingly, the vacancy rate for these apartments soared to a record high of 7.1%. This signifies that while the rate of new apartment construction is tapering off, plenty of new units are still hitting the market.
In September, the national median rent was $1,394. This is $11 less than in September 2022 and is slightly below the peak we saw in August 2022. However, typical rents remain about 22% higher than in January 2021.
In summary, while rent growth appears to be leveling off at a national level, local markets are showing diverse trends. It will be interesting to watch how these changes impact both renters and the broader housing market in the coming months.
Source link
Breaking News: Business,Housing,Real estate,Mortgages,Los Angeles,business news
