realtor.com February 2024 Economic and Housing Market Update

In the following brief video, from realtor.com, we hear relevant economic and real estate information you need to know to navigate the housing market as a homebuyer, home seller, or industry professional.

In February, Chief Economist Danielle Hale highlights recent stronger economic readings including for GDP and the latest labor market data. She hones in on a key income indicator and what it means for consumers. Danielle also reviews the thinking from the January Fed meeting and how this data and recent inflation indicators have impacted investor expectations and could impact the path for mortgage rates going forward.

Realtor.com® Avail Survey Finds Despite Cooling Rental Prices, Homeownership Remains Out of Reach for Many

Fewer independent landlords are planning to raise rents this year, but tenants paying persistently higher rents say it’s likely to impact their home purchasing plans this year

Santa Clara, CA – Feb. 8, 2024 (PRNewswire) Over the past few years it’s become more expensive than ever to rent, and with rental affordability a pressing national concern, landlords and tenants alike say it’s impacting their future plans, according to a new Realtor.com® Avail Landlord & Renter Survey released today. Fewer surveyed independent landlords are planning to raise rents this year, but with more tenants paying persistently higher rents in recent years, many renters say it’s likely to impact their home purchase plans this year.

“The once-hot rental market has been stabilizing and softening year-over-year since May 2023, mostly from a surge in new rental options coming to the market that gave renters more to choose from. But the surge in rents and the sheer number of renters, many of whom have held off on buying in recent years, continue to minimize any potential price impacts that increased rental inventory could have on the market,” said Danielle Hale, Chief Economist, Realtor.com®. “The median asking rent in 2024 is expected to drop only slightly below its 2023 level (-0.2%), but with wages rising 4.5% in January and anticipated to continue growing, even the modest decline in rent is giving households a real break, reducing the share of each paycheck going toward rent.”

Fewer landlords raising rents this year
According to the survey, while six in 10 landlords (60%) plan to raise rent in the next 12 months, that percentage declined in recent quarters, down from 65% in Q1 2023. The majority of surveyed landlords (69%) noted they raise rent differently for renewals versus new leases, with the most opting for 0-5% increases for renewals and 0-10% increases for new leases. Among landlords who don’t raise rents differently for renewal versus new tenants, the majority (50%) plan to increase rent between 0-5%.

Planned rent increases are inline with higher costs across the board for many Americans, including landlords who are passing those costs on to their tenants. The majority of landlords (60%) stated that their ownership costs increased upwards of 10% in the past 12 months. Among landlords not planning to raise rents this year, 72% cite their unit already being priced at or above local market value.

Persistently high prices squeeze renters
The average responding renter pays between $1,000 and $1,500 monthly, but the survey found more renters are paying rents upwards of $1000–$2000 than in previous surveys, indicating continued rent increases for many across the country. In fact, 71% of surveyed renters noted a rent increase when renewing their most recent lease. And relief from high housing costs isn’t in sight, with 35% of surveyed renters anticipating future rent increases and 38% unsure if they will see one, leading nearly two thirds (63%) to explore other housing options besides renewing their current lease. Common reasons for those not renewing leases included that the current rent was too expensive (43%) and unaffordable rent increases (23%).

For some, staying put when a lease is up and negotiating rent increases may help save money; the percentage of renters attempting to negotiate rent increases when renewing their lease increased from 28% in Q1 2023 to 34% in Q4 2023. This may be especially true in 2024 as higher rental vacancy rates may mean landlords are more interested in securing renewals.

Budget constraints put home buying plans on pause
Rising interest rates and inflation are impacting home purchasing plans for many renters looking at buying in the year ahead, with 82% of surveyed renters noting the economy has had an impact on their housing plans. Among renters who are not considering a home purchase this year (71%), the majority cited not having enough for a down payment (61%) and that interest rates are too high (42%).

The proportion of renters considering purchasing a home in the next 12 months decreased slightly from 30% in Q1 2023 to 29% in Q4 2023, with concerns about a lack of savings and their ability to qualify for a mortgage increasing. That’s not surprising, given that two thirds of renters (68%) reported saving less each month than they were 12 months ago.

Rental owners staying put on their properties 
Higher home prices and mortgage rates are also impacting landlords’ plans for investing in more rental properties in the year ahead. Only 22% of surveyed landlords reported plans to buy one or more rental properties in the next 12 months, not unexpected given that approximately 7 in 10 surveyed landlords already have a mortgage on at least one rental property, and would likely finance another purchase with a mortgage. The majority of landlords have no plans to exit the market either: 73% stated they don’t plan to sell any units in their portfolio over the next 12 months.

Methodology
Avail’s quarterly survey of landlords and renters was conducted online in the U.S. between Dec. 6-15, 2023. Approximately 2,419 landlords and 2,241 renters were surveyed. The margin of error for landlords is estimated at ±2.62% and ±2.72% for renters.

About Realtor.com®
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today’s on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.

Media Contact
Sara Wiskerchen, press@move.com

SOURCE Realtor.com

Realtor.com® December Rental Report: Price Peak Behind Us As Rents Continue to Fall at Year’s End

In December, U.S. median rents dropped (-0.4%) for the eighth month in a row and across all-sized homes

Santa Clara, CA – Jan. 25, 2024 (PRNewswire) The U.S. rental market experienced a noticeable shift in momentum in 2023 and closed out the year with eight straight months of year-over-year price declines, according to the Realtor.com® December Rental Report released today. While rents are overall up from pre-pandemic levels, an uptick in supply from a building boom in recent years means 2023 didn’t see a new peak in rent prices from their 2022 highs.

In December, the median asking rent for 0-2 bedroom properties in the 50 largest metros dipped to $1,713, down $7 (-0.4%) from the prior December and down $63 (-3.5%) from its July 2022 peak. Median rents declined across all unit sizes, and most notably in Western metros, but are still $309 (22.0%) higher than the same time in 2019.

“The rental market took a turn in 2023 as an influx of new multi-family apartments coming to the market exerted downward price pressure on median asking rents, which resulted in eight consecutive months of year-over-year price declines as we closed out the year,” said Danielle Hale, Chief Economist at Realtor.com®. “Amid high inflation and costs, softening rental prices throughout 2023 offered renters a small reprieve, and looking forward, Realtor.com® anticipates continued weakness in the rental market for 2024, as a much-needed supply of apartment units continues to come onto the market and further impacts market dynamics.”

December 2023 Rental Metrics by Unit Size – National

Unit SizeMedian RentRent YoYRent Change – Dec 2019
Overall$1,713-0.4 %22.0 %
Studio$1,437-1.0 %16.7 %
1-bed$1,593-0.7 %21.7 %
2-bed$1,896-0.4 %24.8 %

Supply exceeds demand in West, South and pushed down prices, while Northeast, Midwest see the opposite
Regionally, rental trends in December mirrored patterns seen in October and November. In the West and South, supply exceeded demand, leading to a decrease in rents, while markets in the Northeast and Midwest experienced more rental demand compared to supply, resulting in sustained rent growth.

In December 2023, the median rent in the West was 1.6% lower than a year ago. Big metros such as San Francisco (-2.8%) and Los Angeles (-3.5%) continued to see year-over-year rent declines. While rental demand in the South remains vigorous, heightened supply from a substantial 32.0% growth in annual multifamily completion rates from January–October 2023 contributed to a downward push on rent prices, resulting in an overall decline in rental costs. The median asking-rent for 0-2 bedroom properties in the South was -0.5% lower than one year ago. Orlando, Fla. (-6.2%), Austin, Texas (-5.4%) and Dallas (-4.7%) saw the most significant year-over-year rent declines.

In contrast, rents in populous Northeastern metros such as New York (6.2%) and Boston (6.3%) continued to experience faster growth, likely the result of heightened demand from a robust labor market and slower growth in new multi-family home construction in the region. Midwest metros, bolstered by relative affordability, were up 2.0% from the same time last year. Specifically, Milwaukee (5.0%), Cleveland (4.7%), Indianapolis (2.8%) and St. Louis (2.8%) emerged as the top-performing markets in the Midwest with the fastest year-over-year price growth.

Rental Data – 50 Largest Metropolitan Areas – December 2023

MetroMedian Rent (0-2
Bedrooms)
YOY (0-2
Bedrooms)
Atlanta-Sandy Springs-Roswell, GA$1,617-3.90 %
Austin-Round Rock, TX$1,546-5.40 %
Baltimore-Columbia-Towson, MD$1,8001.00 %
Birmingham-Hoover, AL$1,2464.10 %
Boston-Cambridge-Newton, MA-NH$2,9556.30 %
Buffalo-Cheektowaga-Niagara Falls, NYNANA
Charlotte-Concord-Gastonia, NC-SC$1,553-2.80 %
Chicago-Naperville-Elgin, IL-IN-WI$1,837-0.50 %
Cincinnati, OH-KY-IN$1,3292.40 %
Cleveland-Elyria, OH$1,2264.70 %
Columbus, OH$1,1771.10 %
Dallas-Fort Worth-Arlington, TX$1,507-4.70 %
Denver-Aurora-Lakewood, CO$1,9120.20 %
Detroit-Warren-Dearborn, MI$1,3120.30 %
Hartford-West Hartford-East Hartford, CTNANA
Houston-The Woodlands-Sugar Land, TX$1,3962.40 %
Indianapolis-Carmel-Anderson, IN$1,2922.80 %
Jacksonville, FL$1,5310.20 %
Kansas City, MO-KS$1,3080.10 %
Las Vegas-Henderson-Paradise, NV$1,4890.70 %
Los Angeles-Long Beach-Anaheim, CA$2,826-3.50 %
Louisville/Jefferson County, KY-IN$1,2435.80 %
Memphis, TN-MS-AR$1,258-1.00 %
Miami-Fort Lauderdale-West Palm Beach, FL$2,368-3.50 %
Milwaukee-Waukesha-West Allis, WI$1,6135.00 %
Minneapolis-St. Paul-Bloomington, MN-WI$1,5081.30 %
Nashville-Davidson–Murfreesboro–Franklin, TN$1,6070.00 %
New Orleans-Metairie, LANANA
New York-Newark-Jersey City, NY-NJ-PA$2,8176.20 %
Oklahoma City, OK$1,0023.60 %
Orlando-Kissimmee-Sanford, FL$1,684-6.20 %
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD$1,778-1.00 %
Phoenix-Mesa-Scottsdale, AZ$1,552-2.70 %
Pittsburgh, PA$1,4400.20 %
Portland-Vancouver-Hillsboro, OR-WA$1,658-6.00 %
Providence-Warwick, RI-MANANA
Raleigh, NC$1,528-2.10 %
Richmond, VA$1,4925.60 %
Riverside-San Bernardino-Ontario, CA$2,182-3.10 %
Rochester, NYNANA
Sacramento–Roseville–Arden-Arcade, CA$1,860-1.20 %
San Antonio-New Braunfels, TX$1,2750.30 %
San Diego-Carlsbad, CA$2,822-0.10 %
San Francisco-Oakland-Hayward, CA$2,836-2.80 %
San Jose-Sunnyvale-Santa Clara, CA$3,1991.80 %
Seattle-Tacoma-Bellevue, WA$1,988-1.20 %
St. Louis, MO-IL$1,3002.80 %
Tampa-St. Petersburg-Clearwater, FL$1,738-3.60 %
Virginia Beach-Norfolk-Newport News, VA-NC$1,5082.70 %
Washington-Arlington-Alexandria, DC-VA-MD-WV$2,1985.20 %

Methodology
Rental data as of December for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com®. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). We use rental sources that reliably report data each month within the top 50 largest metropolitan areas. Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.

With the release of its July rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting more comprehensive rental listing trends and metrics. The new methodology is expected to yield a cleaner, more representative and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better represent the true cost of primary housing for renters. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since July 2023 will not be directly comparable with previous releases and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.

About Realtor.com®
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today’s on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.

Media contact: press@realtor.com

SOURCE Realtor.com