Rents are on the rise, according to the October Zillow Real Estate Market Report, falling in only two of the 35 largest metros. However, as Zillow notes, this rate of growth has slowed in each of the past three months, but growth is expected to continue through the end of the year.
The two markets where rents dropped were Columbus and Houston, where rents dropped 1.8% and 0.6%, respectively.
Zillow adds, “What's more, the rate of appreciation has increased since a year ago in 26 of those large markets, most significantly in Las Vegas (3.1 percentage-point gain), Kansas City (2.8 percentage-point gain) and New York (2.3 percentage-point gain).”
The hottest rental markets were Phoenix (up 6.4% annually), Las Vegas (up 5.2%) and Charlotte (up 4%).
"Despite some fearful headlines, the U.S. economy keeps on trucking, and that is reflected in the continued rent growth across the country. The unemployment rate remains near record lows and wage growth keeps adding to renters' pocketbooks," said Zillow Director of Economic Research Skylar Olsen. "The story of today's rent growth is far from just that of a few expensive superstar cities – rather, growing demand for rental housing is bumping up against limited housing supply and low vacancies all across the country."
In home prices, San Jose and San Francisco were the only two large markets that saw home values fall year-over-year. Home values are down 11.1% annually in San Jose and 3% annually in San Francisco. Home values also fell month-over-month in Dallas and Indianapolis, marking the first monthly drops since May in each market.
Mortgage rates listed on Zillow rose slightly in October. Rates reached their monthly low of 3.55% on October 4, then peaked at 3.76% on October 11. Rates ended October at 3.6%, up one basis point from the start of the month.