The Agency CEO Mauricio Umansky discusses the real estate sector as mortgage rates hit a 28-year low, down 5.7%.
Renters might just be getting some relief as February marked the ninth consecutive month in which rent growth slowed.
Last month, the median U.S. asking rent rose to a mere 1.7% year over year to $1,937, according to the latest data from Redfin. This marked the “smallest increase in nearly two years and the lowest level in a year,” the technology-powered real estate agency reported.
Rising rents haven’t slowed as much as expected “in part because the labor market has held up better than anticipated, which has helped prop up demand,” Redfin Deputy Chief Economist Taylor Marr said in a statement.
Rents are up 16.5% from a year ago, the data showed. That’s nearly a ten-fold jump from last month’s rise.
Rents fell 0.3% month-over-month from January, but they are still elevated compared to pre-pandemic levels. The median asking rent last month was 21.4% higher compared to February 2020 – one month before the coronavirus was declared a pandemic.
“For Rent” sign outside an apartment building in the East Village neighborhood of New York, July 12, 2022. (Gabby Jones/Bloomberg via Getty Images / Getty Images)
Redfin noted rent growth has slowed given the “persisting high housing costs, inflation, recession fears and a slowdown in household formation have made people less likely to move.” This put a “damper on demand for new leases,” Redfin added.
That coupled with a surge in apartment construction helped slow rent growth.
The number of apartments under construction hit its highest level since 1974, according to a January report from the National Association of Home Builders (NAHB).
As of January, there were 943,000 apartments under construction, an uptick of 24.9% compared to a year ago, according to the NAHB.
‘For Rent’ sign in front of a building on December 06, 2022 in Miami Beach, Fla. ( Joe Raedle/Getty Images / Getty Images)
Now, landlords are “grappling with a rise in vacancies as an influx of new apartments hits the market and demand slows from its peak,” Marr said.
Still, inflation hasn’t allowed for prices to drop.
“Stubbornly high inflation is boosting expenses for landlords, so instead of dropping rents they may seek to lure renters with other concessions, like free parking or a discounted security deposit,” Marr said.
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TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
