Colorful cafe bars at the iconic Beale Street music and entertainment district of downtown Memphis, Tennessee.<\/p>\n
benedek | iStock | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
Despite broad hikes in rental prices, competition is easing in some U.S. markets as inventory grows, according to a new report<\/a> from national real estate brokerage HouseCanary.<\/p>\n At the end of 2022, the median U.S. rent was $2,305, which was nearly 5% higher than a year earlier. But when compared to the end of the first half of 2022, that median rent had declined almost 6%, the report shows. <\/p>\n Although rent prices have cooled in some markets, others have continued to grow, including metro areas along the East Coast and through the industrial Midwest, HouseCanary found.\u00a0\u00a0\u00a0<\/p>\n More from Personal Finance:<\/strong> These U.S. metropolitan real estate markets had the biggest year-over-year percentage increase in the median monthly single-family rental listing price from the second half of 2021 to the second half of 2022.\u00a0<\/p>\n 1. Indianapolis; Carmel, Indiana; Anderson, Indiana 2. Charleston, South Carolina; North Charleston, South Carolina<\/strong> New Haven, Connecticut<\/p>\n Barry Winiker | Photodisc | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n 3. New Haven, Connecticut; Milford, Connecticut<\/strong> 4. Naples, Florida; Marco Island, Florida 5. Pittsburgh<\/strong> These U.S. metropolitan real estate markets had the biggest year-over-year percentage decrease in the median monthly single-family rental listing price from the second half of 2021 to the second half of 2022.\u00a0<\/p>\n 1. Memphis, Tennessee<\/strong> 2. Port St. Lucie, Florida<\/strong> Cape Coral, Florida<\/p>\n Keita Araki \/ Eyeem | Eyeem | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n 3. Cape Coral, Florida; Fort Myers, Florida<\/strong> 4. Palm Bay, Florida; Melbourne, Florida; Titusville, Florida<\/strong> 5. Phoenix; Mesa, Arizona; Chandler, Arizona<\/strong> As rent prices ease and mortgage rates rise, it’s become cheaper to rent than buy in many markets.\u00a0<\/p>\n Renting a three-bedroom home is more affordable than owning a comparable median-priced property in most of the country, according to a recent report<\/a> from Attom, a real estate data analysis firm.\u00a0<\/p>\n Similarly, Realtor.com’s December rental report<\/a> published Thursday found the U.S. median rental price, $1,712, was nearly $800 cheaper than the monthly cost for a starter home.\u00a0\u00a0\u00a0<\/p>\n<\/div>\n “It’s a pretty dramatic shift,” said Rick Sharga, executive vice president of market intelligence at Attom, pointing to one year ago when it was cheaper to buy than rent in 60% of the markets Attom analyzed. “You simply can’t overstate the impact that higher financing costs have had on homeownership.”\u00a0<\/p>\n While mortgage interest rates have recently cooled<\/a>, rates more than doubled in 2022, which has never happened in one year, according to Freddie Mac<\/a>. In January 2022, the average 30-year fixed rate mortgage was around 3% before jumping to over 7% in October and November.<\/p>\n Sharga said therate increase made monthly mortgage payments 45% to 50% higher for a home purchase, even as home price appreciation slowed<\/a>. “That probably is the single biggest factor in creating that shift,” he added.<\/p>\n<\/div>\n While conditions for homebuyers may be somewhat more favorable in 2023, it’s difficult to predict whether the economy is heading for a recession<\/a>, which may shift financial priorities, experts say.<\/p>\n “One thing to always keep in mind is that markets are constantly changing,” said Keith Gumbinger, vice president of mortgage website HSH<\/a>. “If you don’t need to be in this marketplace right now, you’re probably better to hold off and watch conditions change.”<\/p>\n Of course, there’s more to homebuying decisions than home prices and mortgage interest rates. “The decision on whether to rent or buy is always a matter of timing,” he said. “And more importantly, it’s a matter of need.”<\/p>\n<\/div>\n<\/div>\n
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What’s in the Biden administration blueprint for a ‘renters bill of rights’<\/a><\/p>\n<\/div>\n5 markets with the largest annual rent increase<\/h2>\n
<\/strong>Median rent at the end of 2021: $1,300
Median rent at the end of 2022: $1,700
Rent increase: 30.8%<\/p>\n
Median rent at the end of 2021: $2,195
Median rent at the end of 2022: $2,750
Rent increase: 25.3%<\/p>\n<\/div>\n
Median rent at the end of 2021: $2,250
Median rent at the end of 2022: $2,800
Rent increase: 24.4%<\/p>\n
<\/strong>Median rent at the end of 2021: $5,200
Median rent at the end of 2022: $6,448
Rent increase: 24.0%<\/p>\n
Median rent at the end of 2021: $1,520
Median rent at the end of 2022: $1,872
Rent increase: 23.2%\u00a0<\/p>\n<\/div>\n5 metro areas with the largest annual rent decrease<\/h2>\n
Median rent at the end of 2021: $1,800
Median rent at the end of 2022: $1,695
Rent decrease: -5.8%<\/p>\n
Median rent at the end of 2021: $2,800
Median rent at the end of 2022: $2,650
Rent decrease: -5.4%<\/p>\n<\/div>\n
Median rent at the end of 2021: $4,000
Median rent at the end of 2022: $3,795
Rent decrease: -5.1%<\/p>\n
Median rent at the end of 2021: $2,300
Median rent at the end of 2022: $2,200
Rent decrease: -4.3%<\/p>\n
Median rent at the end of 2021: $2,350
Median rent at the end of 2022: $2,300
Rent decrease: -2.1%<\/p>\n<\/div>\n‘It’s a pretty dramatic shift’ housing experts says<\/h2>\n
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The decision to rent or buy is ‘always a matter of timing’<\/h2>\n