Increases in mortgage payment amounts outpaced rent increases in October
The average amount of rent paid in the United States in October saw its biggest 12-month jump in at least two years, but apart from some hot metropolisesthe median mortgage payment increased further.
Rents rose an average of 13% year-over-year in October, while the median monthly outlay associated with a home loan with a 5% down payment rose 17%, according to the real estate broker in Redfin line. On a consecutive monthly basis, mortgage payments rose 3.2% and rents rose only 0.4%.
“Mortgage and rent payment growth rates had converged, but a slight rise in mortgage rates and house prices caused an acceleration in the growth of mortgage payments from September to October,” Redfin said in a press release.
However, the median mortgage payment of $1,533 is still lower than the average rent ($1,858). And rents have climbed faster than mortgage payments in 29 of the 50 largest metropolitan areas in the United States. West Palm Beach, Fort Lauderdale and Miami, Florida saw the highest rent increases at 36%, followed by Seattle, Washington and Jacksonville, Florida at 32%. Five other metros also experienced rent increases of more than 30%.
“Rising rents in some of the most desirable cities suggest there is a house shortage, not just homes for sale,” Daryl Fairweather, chief economist at Redfin, said in a press release. “The ‘Build Back Better’ bill that is currently being debated by Congress contains $150 billion in affordable housing spending, which could at least begin to address the problem, but the bottom line is that a lot more housing should be built in the places that grow the most.
A few major cities saw rent increases below the national average, including Chicago, Illinois, 11%; Pittsburgh, Pennsylvania, 7%; and San Francisco, California, 7%. One metro area, St. Louis, Missouri, saw rents drop 4%.