Major cities where rents in the US fell the most

Despite the sharp increase in rental rates, competition is easing in some US markets as inventories grow, according to a report. new report from the national real estate brokerage HouseCanary.

At the end of 2022, the median rent in the United States was $2,305, nearly 5% higher than a year earlier. But average rents ended 2022 were nearly 6% lower than they were at the beginning of the year, the report found.

HouseCanary found that while rents have cooled in some markets, others continue to rise, including in major cities along the East Coast and through the industrial Midwest.

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Renting a three-bedroom home is more affordable than owning a comparable median-priced property in most countries, according to one recent report from Atom, a real estate data analytics company.

Similarly, December of Realtor.com rental report published on Thursday showed the median U.S. rent, $1,712, nearly $800 cheaper than the monthly cost of a new home.

“It’s a pretty drastic change,” Rick Sharga, Attom’s executive vice president of market intelligence, pointed out a year ago when buying was cheaper than renting in 60 percent of the markets Attom analyzed. “You simply cannot overstate the impact of higher financing costs on home ownership.”

While mortgage interest rates have recent coolingthe rate will more than double by 2022, which is unprecedented in a year, according to Freddie Mac. In January 2022, the average 30-year fixed mortgage rate was around 3% before rising to more than 7% in October and November.

Sharga says raising mortgage rates makes monthly mortgage payments 45% to 50% higher on home purchases, even if House price growth slows down. “That was probably the biggest factor that made that change,” he added.

While conditions for homebuyers may be somewhat favorable in 2023, it is difficult to predict whether The economy is headed for a recessionThis could change financial priorities, experts say.

“One thing to always keep in mind is that the market is always changing,” said Keith Gumbinger, vice president of mortgage websites. HSH. “If you don’t need to get into this market right now, it’s probably better to pause and watch the conditions change.”

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