Renters Paid More in 2018 Than Ever Before

RENTERS PAID MORE IN 2018 THAN EVER BEFORE

While home prices continue to appreciate, albeit at a slower pace, according to a report released by HotPads This Week in Real Estate U.S. renters paid a record $504.4 billion in rent in 2018. Below are a few highlights from the last week of the year that influence our business:

Pending Home Sales See 0.7% Drop in November
Pending home sales overall slipped in November, but saw minor increases in the Northeast and the West, according to the National Association of Realtors. The Pending Home Sales Index, a forward-looking indicator based on contract signings, decreased 0.7 percent to 101.4 in November, down from 102.1 in October. However, year-over-year contract signings dropped 7.7 percent, making this the eleventh straight month of annual decreases. The Pending Home Sales Index in the West increased 2.8 percent in November to 87.2 and fell 12.2 percent below a year ago.

Case-Shiller: Home Price Gains Slowing, Still up 5.5%
Home prices continued to ratchet down their advances in October. The Case-Shiller National Home Price Index which covers all nine U.S. census divisions, reported a 5.5 percent annual gain in October, unchanged from the year-over-year reading in September. That index had not been below 6.0 percent for a year until it dropped to 5.7 percent in August. Before seasonal adjustment the National Index managed a 0.1 percent gain for the month and 05 percent after adjustment. “Home prices in most parts of the U.S. rose in October from September and from a year earlier,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The combination of higher mortgage rates and higher home prices rising faster than incomes and wages means fewer people can afford to buy a house. Fixed rate 30-year mortgages are currently 4.75 percent, up from 4 percent one year earlier. Home prices are up 54 percent or 40 percent excluding inflation, since they bottomed in 2012.

Renters Paid More For Housing in 2018 Than They Ever Have Before
Thanks to higher rents throughout much of the year, U.S. renters paid out more in rent than they ever have before, with a total rent payout equal to the gross domestic product of Belgium. According to a new report from HotPads, U.S. renters paid a record $504.4 billion in rent in 2018, topping 2017’s total by $12.6 billion. There were approximately 43.2 million renter households in the U.S. this year, nearly 100,000 less than there were in 2017. The current median rent is $1,475, up 3% from a year ago. HotPads data showed that rents rose about 3% year-over-year throughout the year, continuing a gradual slowdown in rent appreciation that began in mid-2016. And with rents forecasted to continue growing in 2019, driven by higher mortgage interest rates likely keeping some renters from becoming buyers, that total will likely increase next year.

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