An ‘Apartments for Rent’ sign hangs in front of a building in Miami Beach, Florida. (Photo by Joe Raedle/Getty Images)
OAN’s Elizabeth Volberding
11:30 AM – Monday, November 20, 2023
Reports show that nationwide rent prices decreased in October, signifying that the rental market is mellowing since the Federal Reserve has carried interest rates at its highest point in years.
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On Monday, Rent.com released a report which indicated that rent fell by just over 1.6% from the previous month.
Therefore, the national median rent price is currently $1,978, which marks the most inexpensive price listed since April, as well as marking the first time in five months that the median price has decreased under $2,000.
The data indicates that this is the second month in a row of lowering rent prices
September’s decline was the first drop in rent prices in six months and indicated the maximum monthly decrease since 2022. From August to September, the rental market dropped 2.5%.
The decline can additionally be viewed as pleasant news for the economy since the Fed has been in the process of attempting to tamper down inflation with monumental interest rate growth for over a year.
However, even with the tension of higher rates, rent prices still managed to escalate over the summer.
“Nationwide, October rent prices are down month over month, a two-month trend that provides further evidence the market is stabilizing. The September decline at 2.5 percent, was the first real monthly decline since February 2021 and the largest month-over-month decline since September 2020,” the report read. “Year-over-year growth slowed in October, up 7.8 percent. It represents the second consecutive single-digit yearly increase after an 8.79 percent rise in September 2022 when year-over-year changes dipped into the single digits for the first time since September 2021.”
Increasing home prices and rents have damaged consumers who have previously been hit with elevating inflation.
“Price growth continues to be held down by below normal demand, increased inventory, and a return to seasonal price trends that typically begin dropping in the fall,” the report stated. “October’s year-over-year change was the lowest price change since May, when yearly prices dropped just over half of one percent.”
Higher rents have continued to contribute to the accelerating inflation of the past two years. Particularly, rent consumes about 7% of the Consumer Price Index (CPI), which marks the most specified inflation estimation.
According to newly released CPI records, the headline inflation decreased to a 3.2% rate for the year which ended in September and yearly inflation was at its smallest amount in June, showing 3%.
However, there are great regional differences regarding rent prices.
Year-over-year (Yoy) rental price surges were listed in the Midwest, however, rents in that region are still the most affordable in the country, with the median price sailing at $1,430.
Additionally, the Northeast had year-over-year price increases, although rents there are the most expensive in the United States, with a median price of $2,392.
“The West was the second most expensive region with a median price of $2,392. Prices dropped 1.5% on a yearly basis there, continuing a trend of year-over-year price declines that began in January 2023,” the report stated.
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