Apartment rents are on the rise, but not everywhere. That said, “finding a cheap apartment often feels like winning the lottery,” notes Apartment Guide, a listing and resource for apartments nationwide, in a recent study.

Renters Are Facing Bidding Wars Too

Single-Family Rents Post Sharpest Increase Since 2005

Apartment Guide identified areas throughout the country where rent is affordable and less than the nationwide average of $1,711 per month for a one-bedroom apartment. For example, Maryland, Alabama, and Michigan have seen significant decreases in average rents over the past year. Also, some of the cheapest apartments tend to be near city centers and often along the East Coast, according to the study.

The 30-year fixed-rate mortgage held near last week’s average and continues to average near historical lows and under 3%.

“Mortgage rates stayed relatively flat this week,” says Sam Khater, Freddie Mac’s chief economist. “Housing is in a similar phase of the economic cycle as many other consumer goods. While there is strong latent demand, low supply has caused prices to rise as shortages restrict the amount of sales activity that otherwise would occur.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 19:

• 30-year fixed-rate mortgages: averaged 2.86%, with an average 0.7 points, down slightly from last week’s 2.87% average. Last year at this time, 30-year rates averaged 2.99%.
• 15-year fixed-rate mortgages: averaged 2.16%, with an average 0.6 points, increasing from a 2.15% average. A year ago, the 15-year rate averaged 2.54%.
• 5-year hybrid adjustable-rate mortgages: averaged 2.43%, with an average 0.3 points, dropping from last week’s 2.44% average. A year ago, 5-year ARMs averaged 2.91%.

Freddie Mac reports average commitment rates along with points to better reflect the total upfront cost of obtaining a mortgage.

The decrease in new-home construction affects the overall housing market, including the rental market, says Lawrence Yun, chief economist of the National Association of REALTORS®.

Housing starts in July dropped 7%, and single-family home construction within that fell 4.5%, the Commerce Department reported Wednesday.

“Rents will be soaring in the coming months, especially for apartment units, as homebuilding retreated in July,” Yun says. “There was a housing shortage before the pandemic, and the shortage has been exacerbated during the pandemic.”

Homebuilding needs to “greatly” increase as the job recovery takes hold, Yun adds.

But builders blame supply-chain disruptions, rising material costs, lags in getting approvals for land lot development, and labor shortages for stifling home construction. Buyer demand for new homes is strong, they say, but the challenges and cost rises have become too great to meet it.

Read more: Flooded With New Orders, Builders Limit Sales

Builders are slowing construction activity as costs rise, says Danushka Nanayakkara-Skillington, the National Association of Home Builders’ assistant vice president for forecasting and analysis. “Starts began the year on a strong footing but in recent months some projects have been forced to pause due to both the availability and costs of materials,” Nanayakkara-Skillington says.

Home prices for both new and existing are surging. The median price of a newly built single-family home was $361,800 in June; the median existing-home price of a sold home in June was $363,300.

“With home prices having risen by record amounts over the past year, home buying will become an increasing challenge, and a good number of households may simply decide to rent,” Yun says. “In addition, the jobs recovery is enticing people out of their parents’ homes to seek their own housing.”

Rental demand remains strong. Yet, new multifamily construction, which includes apartment buildings and condos, fell by 13% last month, the Commerce Department reports.

“With an inadequate supply of available homes, rents will be strengthening and adding further pressure to overall consumer price inflation,” Yun says.

Vacation homes are in demand since the pandemic, but which hot spots are consumers targeting that offer some of the best investment potential?

Vacasa, a vacation rental management platform, released its 2021 Top 25 Best Places to Buy a Vacation Home report, identifying the top U.S. destinations for purchasing a vacation rental property. Among other factors, researchers factored in average cap rate or yearly rate of return in determining the rankings.

“Market conditions are always shifting, but the accelerated and lasting adoption of short-term rentals during the pandemic has had a clear impact on second-home sales,” said Shaun Greer, vice president of sales and marketing at Vacasa. “The spike in guest demand and preference for new, more remote destinations is changing where prospective buyers can find the best investment properties.”

Gatlinburg, Tenn., topped this year’s list, climbing four spots from 2020. Newcomer cities claimed more than half of the spots in 2021, including Deep Creek Lake, Md., Cle Elum, Wash., Litchfield Beach, S.C., and Twentynine Palms, Calif.

The following are the top 25 places to buy a vacation home in 2021, according to Vacasa’s rankings:

1. Gatlinburg, Tenn.: $320,111 (median home sale price)
2. St. Augustine, Fla.: $365,576
3. Gulf Shores, Ala.: $402,905
4. Dauphin Island, Ala.: $382,699
5. Norris Lake, Tenn.: $343,907
6. Blue Ridge, Ga.: $290,934
7. Palm Springs, Calif.: $539,370
8. Deep Creek Lake, Md.: $439,367
9. Seaside, Ore.: $466,086
10. Ludlow, Vt.: $346,950
11. Big Bear, Calif.: $372,667
12. Rockaway Beach, Ore.: $330,831
13. Cle Elum, Wash.: $551,586
14. Big Sky, Mont.: $850,000
15. Twentynine Palms, Calif.: $263,897
16. Killington, Vt.: $317,336
17. Bear Lake, Utah: $383,734
18. Litchfield Beach, S.C.: $499,259
19. Pagosa Springs, Colo.: $361,320
20. Banner Elk, N.C.: $331,290
21. St. George Island, Fla.: $471,501
22. Ellijay, Ga.: $281,402
23. Florissant, Colo.: $367,000
24. Corolla, N.C: $608,953
25. Holden Beach, N.C.: $580,847

View more information on each place as well as the cap rates at vacasa.com.

Even in this ultra-hot competitive market, there’s a limit to what home buyers are willing to pay. Some home sellers are starting to see their listings linger on the market, and those sellers may face the prospect of a price cut.

Realtor.com®’s July housing data showed that about 45 cities of the country’s 300 largest had an increasing number of homes with price cuts. “For buyers, these trends hold the promise of a less frenzied market, with more choice and better prices,” says George Ratiu, realtor.com®’s senior economist.

Still, home prices are still rising by double-digit margins in many cities—even those posting more price cuts. Price cuts occur in even the healthiest of housing markets, realtor.com® notes.

“Price cuts could signal a turning point in the market, but they may also just be a sign of sellers getting ahead of buyers in pricing,” Danielle Hale, realtor.com®’s chief economist, said. “There seems to be some markets where it’s a local custom to price real estate that way.”

Realtor.com®’s researchers reviewed monthly listing data to identify the markets with the highest percentage of markets with price reductions. For geographic diversity, they limited their list to one city per state. The following cities topped their list with the highest share of price cuts:

1. Des Moines, Iowa

• Median list price in July: $193,050
• Percentage of home listings with price cuts: 32%

• Median list price in July: $330,050
• Percentage of home listings with price cuts: 28%

3. Toledo, Ohio

• Median list price in July: $117,050
• Percentage of home listings with price cuts: 26%

4. Metairie, La.

• Median list price in July: $359,050
• Percentage of home listings with price cuts: 24%

5. Philadelphia

• Median list price in July: $289,050
• Percentage of home listings with price cuts: 22%

6. Portland, Ore.

• Median list price in July: $550,050
• Percentage of home listings with price cuts: 20%

7. Anchorage, Alaska

• Median list price in July: $315,050
• Percentage of home listings with price cuts: 19%

View the full list at realtor.com®.

A federal judge rejected a request from housing groups on Friday to block the Centers for Disease Control and Prevention’s latest eviction moratorium, but the legal fights are far from over.

Led by the Alabama and Georgia associations of REALTORS®, with the National Association of REALTORS®’ support, the plaintiffs are expected to take their case back to appeals court, arguing that the government has overextended its legal authority with a nationwide eviction moratorium that has put housing providers at financial risk.

The recent motion made by housing groups called for the courts to immediately end the eviction ban but received a setback on Friday when U.S. District Court for the District of Columbia Judge Dabney Friedrich denied the request. But upon a closer look at her ruling, the denial was “on technical, procedural grounds, but the court confirmed its opinion that the CDC is unlikely to succeed on the merits,” NAR said in a statement. “In the ruling, the Judge said her hands are ‘tied’ by a prior D.C. Circuit Court decision that came down before a majority of the Supreme Court made its views known about the unlawfulness of the moratorium. We are confident in our position that this unlawful eviction ban will soon come to an end.”

In previous court rulings, the U.S. Supreme Court has warned that the moratorium was on legally shaky ground and could not be extended without congressional authorization with new legislation. Lawmakers attempted a last-minute request on July 30 to try to extend the nationwide eviction moratorium before the original expired on July 31 but failed to gain enough traction, resulting in the ban expiring. However, the CDC immediately issued a new order that runs until Oct. 3.

Find rental assistance resources at nar.realtor as well as state-by-state eviction moratorium laws.

The CDC’s Latest Ban

The CDC’s latest eviction moratorium was met with controversy as soon as it was introduced. Housing providers argue they’ve faced more than a year of unpaid rent. They’ve blamed moratoriums, which the CDC first put in place last September, for costing them more than $13 billion per month in unpaid rent.

The CDC’s current moratorium applies only to areas with high COVID-19 transmission. But that still covers about 90% of renters in the country, and coverage could increase to 100% with higher rates of infection.

Soon after the new moratorium was announced, the Alabama and Georgia state REALTOR® associations, along with two housing providers and their property management companies, filed an emergency motion in federal court to block enforcement of the extension. Read more about the legal challenges in NAR’s Washington Report.

Rental Assistance Still Available

As lawsuits loom, NAR is urging swifter distribution of the $45 billion in rental assistance, which is available in every state. So far, only about $4.2 billion has been allocated, according to a recent analysis by the National Low Income Housing Coalition.

The Consumer Financial Protection Bureau has debuted a new tool to apply for rental assistance.

“About half of all housing providers are mom-and-pop operators, and without rental income, they cannot pay their own bills or maintain their properties,” NAR President Charlie Oppler said in a statement in early August. “NAR has always advocated that the best solution for all parties is rental assistance paid directly to housing providers to cover the rent and utilities of any vulnerable tenants during the pandemic. No housing provider wants to evict a tenant and considers it only as a last resort.”

For additional updates, visit nar.realtor/rental-assistance.

Mortgage rates inched up slightly from their near all-time lows this week. The 30-year fixed-rate mortgage averaged 2.87%, Freddie Mac reported.

“Following last Friday’s strong jobs report, which revealed broad based gains in employment and wage growth, mortgage rates are moving higher,” said Sam Khater, Freddie Mac’s chief economist. “After dropping for six consecutive weeks, the 30-year fixed-rate mortgage increased by 10 basis points week over week. Despite the rise, rates remain very low, particularly given that economic growth is strong and will continue into next year.”

While mortgage rates remain at historical lows, the National Association of REALTORS® predicts rates will rise modestly in upcoming months as the economy continues to recover. NAR predicts that the 30-year fixed-rate mortgage reaches a 3% average for 2021.

Freddie Mac reported the following national averages for the week ending Aug. 12:

• 30-year fixed-rate mortgages: averaged 2.87%, with an average 0.7 point, rising from last week’s 2.77% average. Last year at this time, 30-year rates averaged 2.96%.
• 15-year fixed-rate mortgages: averaged 2.15%, with an average 0.7 point, increasing from last week’s 2.10% average. A year ago, 15-year rates averaged 2.46%.
• 5-year hybrid adjustable-rate mortgages: averaged 2.44%, with an average 0.3 point, increasing from last week’s 2.40% average. A year ago, 5-year ARMs averaged 2.90%.

Freddie Mac reports average commitment rates along with average points to better reflect the total upfront cost of obtaining a mortgage.