Home Prices Go Up While Rent Prices Remain the Same
According to Trulia’s Price and Rent Monitors, home prices for single-family homes have gone up while rent prices remained the same. The data is based on homes for sale and rentals that are listed on Trulia. The monitors also account for the mix of homes listed and the rent changes in neighborhoods that are similar through the month of March, 2013.
Now that it’s spring, the house hunting season in full mode. Trulia has also reported a 7.2% increase in home asking prices on a national level, which excludes foreclosures. On a regional basis, home prices went up in 91 of our nation’s 100 largest metro areas. And the west has once again seen the biggest price growths.
In March, 2013, rent for single-family homes only increased .1% year-over-year. So, it’s now showing nearly a flat-line in growth. Many are asking why rent has nearly stopped rising on single-family homes. The answer is that there is more supply. Many investors bought up foreclosures to rent them out. There were over 3 million more homes rented in 2012 than in 2005. While single family home rent stayed the same, apartment rent rose 2.9% year-over-year.
The good news to come from this report is that with the oversaturation of single-family rentals, there could be a boost in the market soon. Now that home prices are rising and rents are staying the same, it changes things for many investors. Some investors will start selling what they have, which would create more inventory of homes for sale. And, more renters will start to buy homes before the prices go much further up. Renters who don’t or can’t buy will see a much needed relief in rent prices.