6/13/2023 – MetroIntelligence Economic Update by P. DUFFY

MetroIntelligence Economic Update by P. DUFFY

Observed Asking Rents up 0.6 percent in May and 4.8 percent year-on-year

Asking rents climbed by $13, or 0.6%, from April to May, according to the latest edition of the Zillow Observed Rent Index (ZORI). That brings the typical rent price nationwide to $2,048, or 4.8% higher than one year ago, continuing a steady slowdown in annual growth rates ever since the record-high growth rate of 17% observed in February 2022. The year-to-date rent growth of 1.9% is well below the 2.7% average cumulative growth observed in the first five months of the year in pre-pandemic ZORI data. That suggests that overall leasing conditions are still somewhat cool for this time of year, so what growth we have seen is driven mainly by seasonal factors.


Zillow Home Value Index jumps 1.4 percent in May, up 0.9 percent year-on-year

The typical U.S. home value climbed 1.4% from April to May, the strongest monthly growth since last June. The typical home value (according to the raw, non-seasonally-adjusted Zillow Home Value Index) climbed to $346,856. That is 0.9% higher than one year ago, 0.8% below the peak observed last July, and 3.4% above the recent low in January 2023.


Why luxury condos are built in cities with an affordable housing crisis

Despite a lack of affordable housing, many American cities have seen a paradoxical proliferation of new luxury condos. The reason behind this comes down to scarcity. Because cities limit the amount of housing that can be built, developers focus on attracting the wealthiest occupants instead of catering to everyone.