Although the housing market continues to experience a slowdown in home price appreciation, new data from Zillow suggests the nation’s rental market is thriving.
According to the company’s Real Estate Market Report, U.S. rent prices accelerated for the ninth-straight month in June.
As of now, the average apartment costs the typical renter $1,483. This translates to a 3% annual increase, as rent is now up in 49 of the nation's top 50 rental markets.
"As much as record numbers of new apartments led many to believe that rental markets might have become over saturated with new supply, the reality is that demographics and general economic health continue to keep the pressure on," Zillow Director of Economic Research Skylar Olsen said.
And while the pressure may be on for America’s renters, Zillow’s data indicates its homeowners are seeing the market stabilize as home prices moderately rose to $227,700 in June.
All in all, this represents a 5.2% year-over-year increase, which is a decline from last year’s 7.6% annual growth.
“The typical U.S. home is worth $227,700, up slightly from May after month-over-month values dropped for the first time in seven years this spring,” Zillow writes. “That's a stronger confirmation that housing markets are stabilizing as opposed to on the brink of an imminent downturn.”
Despite this reading, a survey from CoreLogic indicated that home prices are set to increase by 5.6% by May next year.
And although this increase may be beneficial to homeowners, CoreLogic highlights this could have a negative impact on many potential homebuyers.
“The recent and forecasted acceleration in home prices is a good and bad thing at the same time,” CoreLogic President and CEO Frank Martell said. “Higher prices and a lack of affordable homes are two of the most challenging issues in housing today, and every buyer, seller and industry participant is being impacted. The long-term solution lies in expanding supply, which will require aggressive and effective collaboration between policy makers, state and local government entities and home builders.”