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Inflated Rental Prices Stabilize As Home Sales Continue to Decline

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The U.S. housing market continues to decline for the seventh straight month, yet rent prices seem to be stabilizing as cumulative price increases remain in the single digits for the first time in 13 months, according to Axios.

Home sales fell another 0.4% from July to August and 19.9% year-to-year, from August 2021, according to a National Realtors Association release. The median rental price showed promise last month, dropping from $1,781 to $1,771, the first decrease since November 2021, Realtor.com reported Thursday.

Luxury home sales, year-to-year, have dropped by 28.1% marking the largest decline since 2012, according to a recent report by brokerage firm Redfin, The Wall Street Journal reported. The decrease trumped the 2020 pandemic numbers of 23.2%, the WSJ reported.

I Was Part of the Home-Buying Rush. I Deeply Regret It. #HousingCrisis #HousingMarket #iAllegedly pic.twitter.com/La8d065ZHH

— iallegedly (@iallegedly) September 21, 2022

Though housing sales have continually dropped, average home prices have cooled off. In the last two months, the median price of a home dropped from $413,800 in June to $389,500, a 6% decrease, Axios reported.

Inflated mortgage rates and a “heated housing market” have slowed home buyers, yet there is a chance people will begin to buy out of necessity as the market stabilizes, Towne First Mortgage Loan Officer Ben Schuhle told the DCNF last week. “If rates continue to rise but home prices fall, I believe we will see an influx of new shoppers shopping out of necessity not for profit.”

Housing affordability has taken a hit as home sales continue to decline and interest rates increase. “The people in the housing business – Realtors, lenders and homebuilders – are seeing fewer clients. The weakness in the housing sector is one factor holding back the GDP growth rate.  In the meantime, homeowners are not under stress, as nearly all of them have locked in low monthly payments from last year,” National Realtors Society Chief Economist Lawrence Yun told the DCNF earlier this week.