The median rent across the 50 largest U.S. metros rose 14.1% year-over-year to $1,876 in June, breaking Realtor.com’s record for the highest rent ever recorded for the 16th straight month. Despite another tough blow for renters, June saw the lowest year-over-year price gain since the start of 2022, possibly indicating the start of a slowdown in a red-hot rental market, Realtor.com reports.
Though some overheated metros are beginning to cool, popular Sun Belt destinations are still seeing astronomical year-over-year growth thanks to unwavering demand from relocating tenants and priced out buyers. Still, renting is more affordable than purchasing a home in the majority of U.S. cities, where rising mortgage rates and record high sale prices are forcing buyers to raise their budgets.
It was still cheaper to pay landlords each month rather than a mortgage in 38 of the 50 largest metros in June, according to the Realtor.com report. Thanks to a hike in mortgage rates, on top of fast-rising home prices, purchasing property has become even more unaffordable. The mortgage rate increase made the monthly cost to buy starter homes in these metros $416 more per month than it would have been under last year’s rate.
“Renters who would be looking to buy are getting priced out of the market,” says [Joel] Berner. “The difference between buying and renting is a lot more than it was a year ago.”