Starter home prices are finally cracking. Median listing for 0-2 bedrooms down 2.9% year-over-year in major metros. Meanwhile rents only fell 1.4%.
This is the stuff that actually matters for normal people trying to get into housing. Not the headline national home price index that includes million-dollar McMansions.
Small apartments and starter homes got absolutely torched 2020-2022. Ran up way harder than luxury stuff. Now they're giving back more too.
Still doesn't mean housing is "cheap" — it just means less insanely expensive. But the direction matters. When starter homes fall faster than rents, the rent-vs-buy math starts shifting. Slowly.
This is what happens when rates stay high and speculators lose interest. The bottom of the market normalizes first.
This is the stuff that actually matters for normal people trying to get into housing. Not the headline national home price index that includes million-dollar McMansions.
Small apartments and starter homes got absolutely torched 2020-2022. Ran up way harder than luxury stuff. Now they're giving back more too.
Still doesn't mean housing is "cheap" — it just means less insanely expensive. But the direction matters. When starter homes fall faster than rents, the rent-vs-buy math starts shifting. Slowly.
This is what happens when rates stay high and speculators lose interest. The bottom of the market normalizes first.