Editor’s Note: Every Friday, WRAL TechWire takes a deep dive into the Triangle real estate market. This week, we’ll take a closer look at what’s happening to Raleigh’s rents and how it compares to inflation in the US economy. Readers can also enjoy listening to his new WRAL podcast. real estate rushthe first four episodes are now available for streaming or download.
Raleigh – Now, here’s the actual inflation. Raleigh’s rent is skyrocketing at twice his rate of inflation. Costs are so high that she ranks seventh in the country in terms of increase, new analysis reports. But there’s even worse news. The pain isn’t over yet.
One UNC Chapel Hill economist predicts the region is in the midst of a crisis. long-term insolvency A never-ending housing market.
Here are the latest:
a report A Redfin study found that among the 50 most populous metropolitan areas in the United States, Raleigh had the seventh-highest year-over-year rent growth on a percentage basis.
How much have Raleigh’s rents increased? Redfin analysis shows rents will increase 16.4% between September 2021 and September 2022, with median asking rent now over $2,000 per month .
Compare that to the latest data on inflation released Thursday morning by the U.S. Bureau of Labor Statistics. Year-on-year inflation was 8.2%, while shelter costs nationwide increased him 6.6%.
Kenan Institute Chief Economist Dr. Gerald Cohen said in an interview with WRAL TechWire: “Especially for low-income households as wages have not yet caught up with inflation.”
Raleigh is up nearly $300 a month from last year
Raleigh’s September 2022 median asking rent was $2,030, compared to a year ago, the median asking rent was about $1,743, or $287 per month. Over the same period, preliminary data from the Triangle Multiple Listing Service showed that median home sales prices rose 14.1% in Wake County and 12.1% in Johnston County, both of which were below regional monthly rental price increases.
“Given the housing shortage and continued influx of businesses in the Triangle, rents are likely to decelerate more slowly than elsewhere,” Cohen said.
Not only are rents high and growing, affordable housing Average mortgage rates for 30-year fixed-rate mortgages rose again this week and are now approaching 7%, according to the latest data. data From Freddie Mac.
“Rents and home prices in Raleigh are well above their long-term trends and above what would be expected based on historical prices,” said a housing economist at Florida Atlantic University and Associate of Graduate Program in Deal. One Ken Johnson said:set of collaborators monthly report Tracks the national housing market, including Raleigh rental market.
The region continues to grow.there are still few vacancies
But just because prices are higher than expected doesn’t mean the region’s expected housing market reversal will happen, Johnson said. That’s because the Triangle is “in the midst of a massive population expansion, driving demand for housing.”
As a result, prices for both rental and for-sale homes probably won’t drop significantly, Johnson said. “Instead, the area will likely be out of reach for a long time with the cost of shelter relative to local income.”
Demand for housing continues despite continued housing growth in the region. A total of 22,304 permits have been approved for private residential structures in the Raleigh MSA in 2021, according to U.S. Census Bureau data. So far, by August 2022, the latest month for which data is available, there were 13,679 permits approved, according to the Census data set.
But that may not be enough housing to meet demand.
Another recent analysis of apartment data found that Raleigh’s rental price gains were slowing year-on-year, and even fell month-on-month in September, although rental prices were still rising. faster than wage growth regional.
further away, data Apartment listings show that the Raleigh Metropolitan Statistical Area vacancy rate remained low at 5.36% in September. This is a little higher than the historically low vacancy rates experienced a year ago, but vacancy rates remain fairly low compared to the last five years.
House prices are likely to continue to rise until the supply of homes meets or exceeds demand in both the rental and sales markets in the region, Johnson said.
WRAL TechWire Reporter Jason ParkerThe author of this report is a licensed North Carolina real estate agent.These special reports use the category tag “triangle real estate” Also “triangle real estate market.”