Monthly rental payments for both single-family homes and multifamily apartments are now rising at the fastest pace in nearly a year, according to Zillow.
The median monthly rent in February came in at $1,472, an increase of 2.4 percent compared with February 2018. For the typical renter, this means about $400 more a year.
Of course all real estate is local, with rents now significantly higher than a year ago in Orlando, Florida (+7.0 percent), Phoenix (+6.8 percent), Riverside, California (+6.2 percent), Tampa, Florida (+5.5 percent) and Pittsburgh (+4.9 percent). Rents in New York City have seen no effect from Amazon’s decision not to build a new headquarters there. Rents in Northern Virginia, where Amazon is still on track to hire thousands of employees, are expected to rise, as home sales and prices are already getting a boost from investors.
The priciest major metro in the country remains San Jose, Calif., at $3,547 in February, up 1.4 percent from a year earlier. It’s followed by San Francisco at $3,448 a month (up 1.6 percent), Los Angeles at $2,835 a month (up 3.5 percent), San Diego at $2,643 a month (up 4.2 percent) and New York at $2,419 (up 1.2 percent).
Source: Zillow Research
What Happened to Rates Last Week?
Mortgage backed securities (FNMA 4.00 MBS) gained +10 basis points (BPS) from last Friday's close which caused fixed mortgage rates to move sideways compared to the previous week.
Overview: Once again, we had some moderate to very strong domestic economic data that would normally be a force that causes MBS to sell off and cause mortgage rates to rise. But geo-political concerns provide enough global fear to keep demand levels for our bonds at very lofty levels which kept rates at very low levels. Great Brittan couldn't get their Brexit plans passed and the best they could do after two failed votes last week was to delay their divorce from the Eurozone.
Jobs, Jobs, Jobs: Wow...another new record! The January Job Openings and Labor Turnover Survey (JOLTS) showed 7.581M unfilled positions which beat out estimates calling for a very high level of 7.310M. Per the BLS, the number of Unemployed is 6.2M...so there are 1.381M MORE JOBS THAN THERE ARE PEOPLE LOOKING FOR JOBS.
Inflation Nation: The Feb Headline Consumer Price Index YOY was lighter than expected (1.5% vs est of 1.6%). Core (Ex Food and Energy) YOY hit 2.1% vs est of 2.2%. Prices fell in prescription drugs and auto prices but shelter costs moved up 3.4% YOY.
Consumer Sentiment: The Preliminary March University of Michigan's Consumer Sentiment Index was much higher than expected (97.8 vs est of 95.3) and a big improvement over Feb's final reading of 93.8
Central Bank Palooza: The Bank of Japan kept their key interest rate at -0.1%.
Taking it to the House: New Home Sales for January hit 607K vs est of 620K. But December was revised upward fro 621K to 652K. Weekly Mortgage Applications rose by 2.3%. Purchases increased by 4.0% but Refinances fell by -0.2%.