Rents and home prices are climbing at a slower pace, new data show



The red-hot US housing market that has enriched property owners in recent years while draining renters and first-time home buyers is showing signs of slowing down, according to new data.

Both rents and home prices are still climbing, but at a more subdued pace, as inflation and rising mortgage rates weaken demand. In June, the average home price jumped 17.3 percent, compared with the 19.3 percent increase recorded in May, according to the data analytics firm Black Knight. That two full percent points is “the Greatest single-month slowdown on record since at least the 1970s,” said Black Knight president Ben Graboske.

Rents prices followed a similar trajectory in the second quarter, with the average monthly payment for an apartment rising 9.4 percent in the three-month period ended June 30, year over year, according to the real estate data firm CoStar, cited by the Wall Street Journal. That compares with the more than 11 percent increases recorded in the preceding two quarters.

The cooling housing market reflects a weakness in the broader economy as would-be home buyers find themselves unable or unwilling to rise inflation, which stands at a 40-year high.

Mortgage rates have been steadily climbing since the Federal Reserve started raising its benchmark interest rates in March, part of its plan to put a lid on soaring costs by making borrowing more expensive. That has significantly increased the monthly payment a home buyer would pay for a given property, making everything less affordable. At the same time, a battered stock market has chipped away at many home buyers’ resources, making it hard to save for a down payment.

This is a developing story and will be updated.


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