State of the housing market: August 2023

Over the last few months, increased multifamily and build-to-rent construction has eased the nationwide housing shortage, softening rent growth. However, there are still not enough houses to make up the estimated 4.3 million shortfall, so home and rent prices aren’t expected to fall dramatically anytime soon.

• According to Realtor.com, the national median list price fell slightly from $445,000 in June to $440,000 in July. Despite the month-over-month decline, house prices are still close to June 2022’s record high of $449,000.

• The site also reports a 5.5% decrease in newly listed homes – from 396,082 in June to 374,028 in July.

• In July, the Federal Reserve raised the federal funds target rate to 5.25% to 5.5%, its highest level in 22 years. As a result, homeowners who might have wanted to sell their homes may have to wait a few more months for high mortgage rates to come down.

• According to data from Zumper, the national median rent for one-bedrooms increased a tenth of a percent from June to July, reaching $1,506. Despite the smallest year-over-year gain set in July since the corresponding month in 2021, July rent is still higher than the previous record set in September 2022 by $2. Two-bedroom median rent is up just $1 at $1,862.

• In some areas, apartment rents are falling: 28 of Zumper’s top 100 cities saw a drop in rental prices from the previous month, while 17 reported no change.

• At the same time, 36% of newly completed multifamily units have asking rents of $2,050 or more. Since the rental market is dominated by high-end apartments that are out of the average household’s price range, demand for single-family homes has held up, and interest in single-family homebuilding is creeping back up.

• Single‐family housing starts in July were at a rate of 983,000 – 6.7% above the revised June figure of 921,000. 

• And yet, the National Association of Home Builders reports the first decline in builder sentiment in seven months. NAHB cites rising mortgage rates and construction costs for why builder confidence in the market for newly built single-family homes in August fell six points to 50. However, they anticipate that the shortage of existing SFR will keep the demand for new builds high.

More housing market headlines

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