Metro where US rental prices have fallen the most

Despite significant increases in rental prices, competition weakens in some US markets as inventories rise new report from national real estate broker HouseCanary.

At the end of 2022, the median rent in the US was $2,305, almost 5% higher than a year earlier. But the average rent at the end of 2022 is almost 6% lower compared to the beginning of the year, the report says.

While rental prices have declined in some markets, others have continued to rise, including in subways on the East Coast and the industrial Midwest.

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Renting a three-bedroom home is more affordable than owning a comparable average-priced property in most of the country, according to the agency. recent report from Attom, a real estate data analysis firm.

Similarly, Realtor.com’s December report rental report published Thursday, found that the median U.S. rental price, $1,712, was almost $800 cheaper than the monthly cost of a starter home.

“It’s a pretty dramatic shift,” said Rick Sharga, executive vice president of market intelligence at Attom, pointing out that a year ago, buying was cheaper than renting in 60% of the markets Attom analyzed. “You just can’t overestimate the impact that higher financing costs have had on homeownership.”

While mortgage interest rates have recently come down, rates have more than doubled in 2022 in a move that has never happened in a single year. Freddie Mac. In January 2022, the average 30-year fixed-rate mortgage was around 3% and jumped to over 7% in October and November.

Sharga said the mortgage rate hike has made monthly mortgage payments 45-50% higher when buying a home, even as house price growth has slowed. “This is probably the most important factor in creating this shift,” he added.

While conditions for homebuyers may be somewhat more favorable in 2023, it is difficult to predict whether the economy is heading for a recession that could shift financial priorities, experts say.

“You always have to remember that markets are constantly changing,” said Keith Gambinger, vice president of the mortgage website. HSH. “If you don’t need to be in this market right now, you’re probably better off waiting and seeing conditions change.”

Of course, the decision to buy a home depends on more than just home prices and mortgage interest rates. “The decision to rent or buy is always a matter of time,” he said. “And, more importantly, it’s a matter of necessity.”