According to a new report from Redfin, the national median monthly mortgage payment for homebuyers rose 67% faster than rents in August. Currently, mortgage payments for new homebuyers are outpacing rent price increases in 21 of the 50 largest U.S. metros.
"Austin has always been a hot real estate market, but the past six months have been wild," said Redfin Austin market manager Jennifer Hoffer. "We've been working with several landlords who want to sell their properties to cash in on high home prices. But renters right now really don't want to move, so they're staying put with long-term leases because they have nowhere to go. I think we will see a spike in rents in the next few months as leases come to an end."
Despite mortgage interest rates falling to record-lows, this is the seventh consecutive month that growth in median mortgage payment for homebuyers has surpassed that of rents. Still, throughout August, growth in rent payments were increasing while growth in mortgage payments were slowing. Additionally, the nationwide average monthly rent of $1,836 is still greater than the $1,494 median monthly mortgage payment for new homebuyers.
"Record high home price growth has priced many renters out of buying, leaving many facing higher rents this summer as more households look to move thanks to the rise of remote and flexible work arrangements," said Redfin lead economist, Taylor Marr. "The end of pandemic eviction moratoriums and mortgage forbearance may also cause landlords to raise rents to cover the risk of future tenant protections or make up for lost rental income."
