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Home Prices and Rents on the Rise

Phil Hall
Jul 22, 2019
Today’s average homebuyer earns more than 62.7 percent of all households, up from 59.8 percent in 2012, according to new data from Zillow

Two new data reports have affirmed that homeowners and renters are paying more their housing.
 
A new study by Redfin has determined home sale prices increased for the third consecutive month in June, rising 3.4 percent year-over-year to a median of $321,200. Only six of the 85 largest metro areas tracked by Redfin recorded year-over-year declines in their median sale price, most notably the California markets in San Jose (-4.9 percent), Oxnard (-4.8 percent) and Oakland (-2 percent).
 
While prices were up, home sales fell 8 percent in June compared to a year earlier, a reversal from the May data when home sales increased 2.2 percent from a year before. Eighty of the 85 metros tracked by Redfin saw year-over-year home sale declines last month, most notably Rochester, NY (-24.2 percent), Omaha (-23.5 percent) and Fort Lauderdale (-22.4 percent). The 8 percent drop was the fourth largest sales decline in eight years.
 
"As national home price growth stabilizes, we're continuing to see supply and demand dynamics play out differently in affordable inland markets than in expensive coastal markets," said Redfin Chief Economist Daryl Fairweather. "In places like Philadelphia and Cleveland, where home prices are growing by double digits and buyers are rate- and price-sensitive, falling mortgage interest rates make buying a home this summer increasingly attractive. But without a commensurate increase in the number of homes for sale, some of the most affordable markets are driving nationwide home prices up."
 
On the rental side of the housing market, Zillow reported rents grew for the ninth straight month during June and are now up 3 percent year-over-year, with the median monthly rent now at $1,483. The largest year-over-year rent increases were found in Las Vegas (up 10 percent), Phoenix (up 8.4 percent) and Orlando (up 7.4 percent).
 
"As much as record numbers of new apartments led many to believe that rental markets might have become over saturated with new supply, the reality is that demographics and general economic health continue to keep the pressure on," said Zillow Director of Economic Research Skylar Olsen. "Yes, we saw rents fall in 2018, but that was driven by the concentration of supply in urban areas and large buildings at higher end price points competing against each other. What the rental market still craves are affordable units spread across the landscape. Show me a three-bedroom apartment in a small building located near good schools and I'll show you an older millennial with kids ready to move in."
 
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