Market update May 2024: Rents cooling, still in hot demand

Until the Federal Reserve cuts interest rates and housing supply catches up with demand, home sale and rent prices will likely remain high for the foreseeable future.

• The national median list price continued to increase seasonally from $424,900 in March to $430,000 in April, according to Realtor.com.

• The site also reports a 9% month-over-month increase in newly listed homes, from 395,536 in March to 432,028 in April, as well as a 12.2% increase year over year.

• Zumper continues to report stable annual rental rates, with one-bedroom rents down 0.6% to $1,486 and two-bedrooms up just 0.1% to $1,843. Despite this cooling, the national one-bedroom rent remains nearly $250 higher than it was in 2021.

• As Zumper CEO Anthemos Georgiades explains, “With Class A buildings marketing concessions that include up to three months of free rent, free parking, and waived deposits and application fees, this, in turn, puts pressure on Class B and C buildings to price competitively as well in order to attract tenants.”

• 59 of Zumper’s top 100 cities saw an increase in rental prices from the previous month, while 28 fell and 13 reported no change.

• Even as inventory increases nationwide, it is still trailing behind demand, suggesting that any changes to average rents for the rest of the year will remain fairly modest.

• Record-high mortgage rates promptly reversed the uptrend in builder confidence recorded in the past couple of months, resulting in a six-point drop to 45 in May, reports The National Association of Home Builders.

• “We are also concerned about the recent code rules that require HUD and USDA to insure mortgages for new single-family homes only if they are built to the 2021 International Energy Conservation Code,” said NAHB Chairman Carl Harris.

• The NAHB believes the new rule will curb home construction and “add up to $31,000 to the price of a new home,” while environmental experts predict households in northern and mountainous states will “save over $18,000 on their housing and energy bills over a 30-year mortgage.”

• Single‐family housing starts in April reached 1,031,000 – 0.4% below the revised March figure of 1,035,000. 

More rental market headlines

HUD raises max deductibles for wind and named storm coverage – Multifamily Dive‍

Property Management Forum highlights rent control, tenant protections, insurance challenges – NAR

Making sense of squatters’ rights as a property manager – PayProp