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Rent In Some Large Cities Begins To Fall

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Median rents fell last month in 11 major U.S. metropolitan areas analysis from real estate Brokerage Redfins as economic headwinds and inflationary pressure discourage renters from moving.

Median asking rents nationwide rose 7.8% year-on-year, according to the company, marking the second consecutive month of single-digit increases following nearly a year of double-digit increases. A typical renter is currently paying $1,983, down 0.9% month-over-month from September.

“Rental demand is slowing as economic uncertainty prompts many renters to stick to the status quo and persistent inflation is pushing renters’ budgets down. Redfin’s deputy chief economist Taylor Marr said in a press release. “There are signs that inflation is starting to ease, but given that rents are still above wages, it will be a while before renters see any meaningful easing.”

In Milwaukee, Wisconsin, rents fell 17.6% from September to October, the biggest drop of any other major urban real estate market. Rents in Minneapolis, Minnesota, fell 7.8%, while rents in Baltimore, Maryland and Seattle, Washington fell 3.2% and 2.7%, respectively. Midwestern and Southern cities saw the fastest gains, with Oklahoma City, Oklahoma up 31.7% month-over-month, while Raleigh, North Carolina and Cincinnati, Ohio were up 21% and 17%, respectively.

Only five metropolitan areas saw rents fall in September. New York City, NY currently holds the highest median rent in the country at $4,068.

According to previous reports, soaring real estate prices have forced some home buyers to Find an apartment Instead of addressing rising purchase costs, it creates upward price pressure in some rental markets. Home prices are currently falling as rising mortgage rates dampen demand. Nonetheless, affordability is also plummeting as mortgage payments rise. data From the National Association of Home Builders.

Interest rates on 30-year fixed mortgages have been below 3% for most of the past two years, according to Reuters. data From the government-backed mortgage company Freddie Mac. Interest rates have surged from about 3% earlier this year to over 7% he earlier this month. Most of the rise came after the Fed raised its target rate at its fastest pace in 30 years.

“The housing market and affordability conditions have continued to weaken throughout the year as rising mortgage rates, supply chain bottlenecks and a shortage of skilled construction workers continue to push home prices higher,” said National Homebuilders. Traders Association President Jerry Conter said. statement“Entry-level buyers are particularly hard hit as they are being priced out of the market.”

Indicators such as the National Association of Realtors Pending Home Sales Index include: witnessed It is declining rapidly, further indicating the market’s low interest in buying new homes. Fannie Mae, a government-backed mortgage securitization company, analysis Last month, we announced that house prices will fall by 1.5% in 2023. Meanwhile, the estimated rate of increase in house prices was revised to 9% from 16% in 2022. The organization has noted early signs of easing labor market pressures. While interest rates are still projected to rise, this has limited the ability of builders to increase housing inventory.

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