Rents Surge Most in 16 Months Pressuring Homebuyer Wannabees
The Rent Cafe's Monthly Rent Report for the 250 largest US cities shows a 3.2% Y-o-Y surge.
The national average rent in April clocked in at $1,377. This marks the highest annual growth rate since the end of 2016.
- Large cities: Las Vegas sees the fastest increasing rents Y-o-Y (6.0%), followed by Denver (5.8%) and Detroit (5.4%). Apartment prices in Brooklyn and Manhattan continue to slide, while rents in Washington,D.C., Portland, and Austin have been steady, growing by less than 1.5%.
- Mid-size cities: Rents in Sacramento cooled down to 6%, but still lead. At the other end of the spectrum are New Orleans (-2.2%), Tulsa (0.5%), and Wichita (1.0%), where rents are growing the slowest.
- Small cities see the top 20 most significant rent increases in April. Rents in the Midland-Odessaarea skyrocketed for another month, 35.6% and 32.6% respectively. At the bottom of the list sit Norman (-2.5%), Lubbock (-2.5%), and Alexandria (-1.1%).
- No significant fluctuation in prices was noticed in Chicago, Philadelphia, and San Francisco, where apartment rents grew slower than 2% over the year.
Wages Not Keeping Up
The above chart was released today by the BLS. For details, please see Jobs Report: Payroll Miss +164K, Nonfarm Wage Growth Anemic +0.1%.
BLS in Agreement
The BLS also has rent of primary residence up 3.6% (from March).
Median New Home Sales Price
Median Real Wages
Homebuyer Wannabee Dilemma
Homebuyer wannabees struggle with rents but cannot afford houses.
The most recent data for median wages is from May of 2016. May of 2017 will be out soon and I will update the chart.
New buyers struggle with rent but homebuying is not an option.
Real median wages are down seven of the last 11 years while home prices (not even reflected in the CPI), have soared.
How the Fed's Inflation Policies Crucify Workers in Pictures
For median wage details, please see How the Fed's Inflation Policies Crucify Workers in Pictures
Deflationary Bust Coming
The current setup leads to another deflationary collapse as we saw in 2008-2009, not an inflation boom.
"If I were trying to create a deflationary bust, I would do exact exactly what the world’s central bankers have been doing the last six years," said Stanley Druckenmiller, 2018 recipient of the Alexander Hamilton award.
That is precisely what I have been saying for a long time.
For an explanation of the coming deflationary collapse, please see Can We Please Try Capitalism? Just Once?
Mike "Mish" Shedlock