HouseCanary, Inc., a real estate brokerage and analytics firm, has released its National Rental Report for Q3 2023. The report highlights that the Single-Family Rental (SFR) inventory continues to expand with a notable surge of 31.5% compared to Q3 2022.
Despite the significant increase in listings, the average days on the market also expanded by 28.4% year-over-year to 27 days. This increase is attributed to the surplus of available-for-rent inventory. Meanwhile, price increases were marginal at just 0.7%, which suggests that SFR prices may have reached their peak. This is particularly striking when compared to the 6% increase observed in Q1 2023.
The southern states, including North Carolina, Florida, Tennessee, Georgia, and Alabama, have experienced the most upward growth in the number of listings available for rent in the market. In fact, these states accounted for all of the top 10 Metropolitan Statistical Areas (MSAs) experiencing the largest listing increases.
Chris Stroud, Co-founder and Chief of Research at HouseCanary, commented on the findings. He noted that the Q3 2023 report reaffirms the resilience of the single-family rental market, with steady year-over-year growth in listings and rental prices. He attributed this to lingering market uncertainties, which have led potential buyers to opt for renting as a way to mitigate property investment risks.
Senior Director of Research at HouseCanary, Brandon Lwowski, added that the projections align with their Q2 2023 outlook. He suggested that median SFR prices may have plateaued, with limited room for further escalation. However, he anticipates that smaller rate increases, along with the initiation of student loan repayments, could create a more favorable environment for purchasing activity in the future.
The report also identified key findings about the rental market for single-family detached listings in Q3 2023. Rent prices remain historically high despite a very slight increase in year-over-year price growth. Southern states have experienced the most upward growth in the number of listings available for rent in the market.
Four California MSAs now top the list for the nation’s highest median rent prices for Q3 2023. By the end of Q3 2023, rental properties stayed on the market for an average of 27.1 days, a 28.4% increase since the same period in 2022.
Experts and economists, including the Federal Reserve, foresee ongoing rate hikes but at a more moderate pace compared to earlier this year. This is expected to create a better market for purchasing activity to pick up speed. Additionally, the commencement of student loan repayments in October is projected to result in downward pressure on interest rates in the future due to reduced consumer discretionary income affecting inflation.
The full report with all additional findings can be viewed on the HouseCanary website.
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