Mike Simonsen at Altos Research is out with his Monday research and it looks like home prices and rents are up to start March…(Altos Research)
- The median price of a single-family home is up 1% from last week to $395,500, this is up 12% year-over-year.
- Rents for a single-family home are currently at $2,100, this is up 17% from last year.
Conventional wisdom says that rents and home prices have an inverse relationship. However, Simonsen argues that is not true, “But it turns out that they move in tandem. Both are driven by household formation and demographics…The massive housing demand right now is catching up from many years of the proverbial Millennials living in their parents basements and they’re now finally forming households. And likewise, when housing demand finally cools, it’ll cool the rental market too.”
NOTE: Inventory has fallen to only 241,000 single family homes unsold on the market. Each week we add maybe 75,000 new listings and we sell 77,000 more. There are no signs anywhere in the data that this trend is slowing let alone reversing.
- In fact, Simonsen argues that all these factors mean that .“..2023 is the earliest we should expect any price moderation.”
This backs up Conor Sen’s argument on Twitter this weekend, “Home prices are going to go up another 15%+ this year and I don’t think people have really absorbed that.”
