PayProp’s Property Management Market Report highlights key housing trends with our monthly data roundup. *
Despite the declining health of the housing market over the past several months, rentals seem to be more resilient – good news for property managers.
- According to the National Association of Realtors (NAR), the national median single-family existing home sales price in a metropolitan area was $398,500 in Q3 2022, up 8.6% year-over-year from $367,100.
- NAR reports the South is the US region with the highest year-over-year home price growth (11.9%) as well as the largest share of single-family existing home sales (44%).
- According to data from Zumper, the national median rent for one-bedrooms decreased 0.8% from September to $1,491 in October. The two-bedroom median rent is also down 0.7% to $1,832. This slowdown broke a 12-month streak of double-digit year-over-year increases – in this metric, the national median rent is up ‘just’ 9.2% over October 2021.
- But demand for rentals isn’t expected to cool any time soon, thanks in part to the Federal Reserve’s recent interest rate hike of 0.75%. The new 3.75 to 4% target range will cause mortgage rates to increase as well, persuading many prospective homebuyers to stay in their rental units for longer instead of paying high borrowing costs.
- This is supported by the 6.0% national rental vacancy rate in the third quarter of 2022, which is not significantly different from the rate in Q1 (5.8%) or Q2 (5.6%). The 0.9% homeowner vacancy rate remains in line with the past nine quarters.
- Alongside these robust numbers, the health of the housing market is also largely determined by construction. According to the National Association of Home Builders, builder confidence in the market for newly built single-family homes dropped another five points to 33 in November, continuing an 11-month skid. There were 6.1% fewer single-family housing starts in October than in September – 855,000 versus 911,000. Construction could pick back up in the coming months if the Fed’s rate hike reins in inflation and moderates the costs of building materials, labor, and homes themselves.
* Our curated overview features key housing market indicators, with an emphasis on the single-family rental market.
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