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A Bit of Housing Cheer: Rent Increases Moderate in June

New York City was No. 1 in one-bedroom rents, with a monthly total of $3,600. It was tied for first in two-bedroom rents at $3,950.
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Residential-rental prices have soared during the pandemic.

Median rent in the top 50 metropolitan markets hit a record $1,849 in May, up 15.5% from a year earlier, according to Realtor.com, a real estate services firm. It was the 15th straight month of record rent.

But things may be starting to calm down.

In the top 100 metro markets, median one-bedroom rent firmed 0.5% to $1,422 in June from May, down from 1% to 2% gains during the pandemic, according to online rental brokerage Zumper

To be sure, the year-over-year increase totaled about 11% in June.

Two-bedroom rent fell 2.9% to $1,708 in June from May and was up about 9% from a year earlier. 

The month-over-month decline is “a signal that some consumers who’d put off buying a home are finally making the jump as housing prices begin to level off,” Zumper said in the report.

As for individual cities, New York was No. 1 in one-bedroom rents, with a monthly figure of $3,600. It was tied for first in two-bedroom rents with San Francisco, with a monthly total of $3,950.

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There were glimmers of hope in Realtor.com’s report on May rents, too. The 15.5% rent increase for the 12 months through May represented the smallest figure since September 2021. The annual growth rate has slowed each month after peaking at 17.3% in January 2022.

And there’s some good news elsewhere on the housing front too.

Inventory Increase

Home inventories are on the rise, increasing an annualized 18.7% in June, according to real estate services firm Realtor.com. That’s a record for Realtor.com data going back to 2017. It was the second straight monthly increase.

“This turnaround in inventory is being driven by both sellers entering the market and by moderating demand,” Realtor.com economists Sabrina Speianu and Danielle Hale wrote in a commentary.

“Newly listed homes entered the market at a higher rate (up 4.5% year-over-year) than in the recent past,” they said.

Meanwhile, “moderating demand has taken a larger toll this month, with pending listings declining sizably (down 16.3%) compared to last year,” they said.

Shorter Shelf Life

“Nonetheless, homes are still spending less time on the market compared to last year and prices are still rising, partially driven by an increase in newly listed larger homes and slow adjustments to seller expectations.”

Those bigger homes represent “opportunities for move-up buyers, as newly listed homes skewed larger,” Hale said. “This first wave of supply improvements may be particularly opportune for summer sellers looking to upgrade from their starter homes.”

Looking forward, “while we anticipate that more inventory will eventually cool the feverish pace of competition, the typical buyer has yet to see meaningful relief from quickly selling homes and record-high asking prices,” Hale said.