As we discovered in the recent realtor.com YouTube video, the median rent for 0- to 2-bedroom rental homes across the 50 largest metropolitan areas across the country hit an all-time high of $1,849 in May. This represents the 15th consecutive month of a new record rent. The median sales price for a single-family home in New Jersey hit another new record of $490,000, up 12.6% from May 2021.
Still, the national median rent for May represented a 15.5% increase over May 2021, a 23.2% increase over May 2020, and a 26.6% increase over May 2019, making the average rent increase over 8% annually per year.
The New Normal is now just the normal. Higher prices continue to raise the economic tide of inflation. Actually, the rise in prices is a natural effect of the low interest rates that kept buyers buying and sellers selling for more than they expected. As the buyers depleted available inventories, home flippers bought-out the lower-priced inventory, buyers were left with little choice except to pay more, buy faster and drive-up mortgage rates.
Even existing home sales declined for the fourth consecutive month, but a great deal of these numbers is due to the atypical contraction of inventories across the board. Plus, due to the supply chain issues, inflation and shortages of buildable lots, the replenishment of inventory hasn’t had an easy time of it.
Still, this is creating a squeeze when it comes to finding an affordable place to purchase or to rent. This is not the normal that the industry has faced for the last 70 years, but it certainly is going to be around for a while until supply can meet demand.