Market update August 2024: High demand despite supply surge

Despite the surge in new home construction across the country, rental demand remains strong, ensuring a resilient market for investors and property managers.

• Meanwhile, in the sales market, the national median list price showed the first seasonal decline this year, falling from $445,000 in June to $439,950 in July, according to Realtor.com.

• The number of newly listed homes dropped 8% month over month, going from 421,020 in June to 387,582 in July. The site also reports a 3.6% increase year over year.

• Zumper reports the national median rent for one-bedrooms rose $5 this July to $1,531, while two-bedroom rents increased $11 to $1,911.

• While that seems low, year-over-year increases in July for these units were 1.7% and 2.6% respectively – the largest annual growth rates since July 2023, when both figures were around 4-5%.

• “The fact that Zumper shows national [year-over-year] rent growth at a 12-month high at the same time as the US delivers a record 50-year high of new supply shows you just how strong renter demand is today,” says Zumper CEO Anthemos Georgiades.

• However, all major Texas markets are bucking the national trend: rents are decreasing due to the extra housing inventory added this year and in 2023.

• 47 of Zumper’s top 100 cities saw an increase in rental prices from the previous month, while 40 fell and 13 reported no change.

• For the time being, rental demand is expected to remain high, likely until the Federal Reserve lowers its key interest rate, potentially tempting renters to apply for mortgages. Federal Reserve Chair Jerome Powell indicated the next rate cut could occur in mid-September.

• Many builders are holding out until then, as the National Association of Home Builders reports builder confidence in the market for newly built single-family homes fell two more points to 39 in August. This dip could signal the end of the record-construction era, or just a temporary slowdown.

• Single‐family housing starts in July reached 851,000 – 4.1% below the revised June figure of 991,000.

More rental market headlines

Unlocking single-family rental trends early and accurately – John Burns Research and Consulting

Property management report shows over half of tenants pay rent online – PYMNTS

Vitaminwater offers free rent to consumers who use its flavors as design inspiration – Marketing Dive