Mortgage payments for first-time buyers grow 67% faster than rents
The national median monthly mortgage payment for homebuyers rose 67% faster than rents over the same period, according to a new report by Redfin (redfin.com), technology-based real estate brokerage.
This is despite the return of mortgage interest rates to near record levels. This is the seventh month in a row that growth in median mortgage payments for first-time buyers has exceeded that in rents. However, in August, rent growth accelerated as mortgage payment growth slowed.
Mortgage payments for new home buyers exceeded rent increases in 25 of the 50 largest metropolitan areas in the United States in August. Nationally, the average monthly rent of $ 1,836 is even bigger than the $ 1,494 median monthly mortgage payment for new buyers.
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“Record home price growth has kept many tenants from buying, leaving many tenants facing higher rents this summer as more households look to relocate as work arrangements ramp up. remote and flexible, ”said Redfin’s senior economist. Taylor marr. “The end of the moratoriums on pandemic evictions and mortgage forbearance may also cause landlords to increase rents to cover the risk of future tenant protections or to compensate for loss of rental income.”
“Austin has always been a hot real estate market, but the past six months have been wild, ”said Market Manager Redfin Austin. Jennifer hoffer. “We have worked with several homeowners who wish to sell their properties to take advantage of the high house prices. But the tenants right now really don’t want to move, so they’re staying there on long-term leases because they have nowhere to go. I think we will see a surge in rents in the coming months as the leases come to an end. “
Where rents have gone up and down the most
Most of the metropolitan areas with the largest rent increases were warm, affordable destinations in Florida, California and Arizona who have benefited from a wave of migration thanks to a newly mobile workforce. Rents increased the most compared to the previous year in Tampa, Florida (29.2%), followed by West Palm Beach, Florida, Miami, Florida and Fort Lauderdale, Florida (all at 28.9%).
Top 10 metropolitan areas with the highest rents
1. Tampa, Florida (29.2%)
2. West Palm Beach, Florida (28.9%)
3. Miami, Florida (28.9%)
4. Fort Lauderdale, Florida (28.9%)
5. Jacksonville, Florida (26.8%)
6. Riverside, California (23.1%)
7. Phoenix, Arizona (21.9%)
8. Las Vegas, Nevada (21.3%)
9. New York, New York State (21.3%)
10. Newark, New Jersey (21.3%)
However, rents are not going up everywhere. A few metropolitan areas have seen declines, including expensive areas where people move away like the Bay area. Rents have fallen in Pittsburgh (-5%), followed by San jose, california (-3%) and St. Louis, Missouri (-1%).
Metropolitan areas with declining rents
1. Pittsburgh, Pennsylvania (-5.1%)
2. San José, California (-2.9%)
3. Saint-Louis, Missouri (-0.5%)
These price cuts are the rare exception to the almost widespread increases in housing costs for renting and buying homes and are not expected to last until the economy recovers from the pandemic. For those who need to relocate and are looking for accommodation to rent, now may be the time to check out some traditionally more expensive coastal metropolitan areas, such as the Bay area, Boston, and Washington DC, where rental costs are increasing more slowly than the national average of 8.5%.
To view the full report, including charts and methodology, visit https://www.redfin.com/news/redfin-rental-report-rents-up-9pct/