Bidding wars are growing more commonplace in the rental market as the demand for apartments and single-family rentals outpaces the supply.

“We’ve been leasing property for almost 20 years, and we haven’t seen an applicant pool this competitive since we’ve started,” Vipin Motwani, managing principal at Iron Gate Development in Clinton, Md., told CNBC. Two weeks ago, Motwani listed a home for rent in Clinton and quickly received 10 applications. He has found that renters now have more money to offer and better credit histories than applicants in the past. He says the latest tenants are willing to pay higher security deposits.

The improvement in the economy is causing some renters to move away from the shared households that they started during the pandemic. As housing prices have rapidly risen, that has priced out some buyers, prompting some to rent.

That added competition is prompting rental prices to rise further. Rents nationwide in July increased 7% annually for one-bedroom apartments and by 8.7% for two-bedroom apartments, according to data from Zumper, a national renal listing platform.

New York City has seen rent applications double compared to 2020. San Francisco has posted a 79% increase in applications and Seattle a 55% jump, according to RentCafe, a rental listing website.

Single-family rental homes have especially grown in demand since the pandemic as renters have looked for more space. Rents for single-family homes grew 6.6% annually, nearly four times the annual increase compared to May 2020, according to CoreLogic.

“Strong job and income growth, as well as fierce competition for for-sale housing, is fueling demand for single-family rentals,” Molly Boesel, principal economist at CoreLogic, said in a statement. She predicts demand for single-family rentals to continue to remain strong for the remainder of the year.

Mortgage demand for home purchases reversed course last week, after falling for the past month, the Mortgage Bankers Association reported Wednesday.

Mortgage applications to purchase a home increased 2% for the week and offered a signal that more first-time buyers may be emerging. Still, purchase applications are 18% lower than a year ago, the MBA said.

Higher prices and the scarcity of housing inventories have been blamed on slowing many segments of the housing market.

“The higher level of purchase activity last week was driven by more government purchase applications, including a 3.3% increase in FHA loans,” said Joel Kan, an MBA economist. “With low for-sale inventory keeping home price appreciation in many markets at record highs, the jump in FHA purchase applications is potentially a sign that more first-time buyers are finding purchase options despite the high prices.”

Mortgage rates rose slightly last week but remain near historical lows and didn’t prove to be a deterrent to home shoppers. The average contract interest rate for the 30-year fixed-rate mortgage with conforming loan balances rose to 2.99%, with points decreasing to 0.30, for loans with a 20% down payment, according to the MBA.

“Homeowners continue to respond to lower rates, with refinance activity climbing to the highest level since February 2021,” Kan said. Applications to refinance rose 3% last week but remain 8% lower than a year ago.

Lot values for single-family, detached homes have never been higher. In 2020, prices jumped 18% to a median lot price nationwide of $53,000, according to an analysis of Census Bureau data by the National Association of Home Builders.

The higher prices for lots—along with material costs—have pressed on buyers’ and builders’ budgets in building new homes.

Read more: Flooded With New Orders, Builders Limit Sales

Lots are priciest in the New England area. Half of all single-family detached spec homes started in the region in 2020 had lot values of more than $120,000. “New England is known for strict local zoning regulations that often require very low densities,” Natalia Siniavskaia, the NAHB’s assistant vice president for housing policy research, writes on the association’s Eye on Housing blog.

The Pacific division tends to have the smallest lots in the country but has the second priciest—a median lot value of $103,000 in 2020.

The Mountain division also set a new record high for its lots in 2020. Half of the lots are priced at or above $73,000.

Housing inventory is increasing with an uptick in more affordable homes, which could lead to a possible door opening for more first-time buyers. New listings rose 6.5% in July, marking the fourth consecutive month for annual increases, according to realtor.com®’s Monthly Housing Report.

“July housing trends show a market still working its way back toward some version of normal,” said Danielle Hale, realtor.com®’s chief economist. “The feverish pace of home sales is beginning to follow historical seasonal patterns, while new listings grew at an unusually high rate for the summer months, further helping the inventory crunch. This is shifting the housing market balance in a more buyer-friendly direction, but buyers may not see much price moderation as suggested by the national trend because it’s partly attributed to a shift toward smaller homes for sale.”

Nevertheless, Hale says that if the change in housing inventory levels continue, “we could see a wave of real estate activity heading into the latter part of the year.”

More than half of the nation’s 50 largest metros posted double-digit gains in new listings, led by Columbus, Ohio (up 42.9%); Baltimore (up 36.9%); Cleveland (up 35.8%); Milwaukee (34.3%); and Richmond, Va. (up 30.1%). The largest increases in new listings occurred in the Midwest (up 19.8%) and the West (up 11.3%), according to realtor.com®’s report.

The report notes that new listings remain below a typical 2017–2019 market, down 9.5%, but more sellers are starting to enter the market as they realize the price gains for their homes.

List Prices Moderating?

The national median listing price in July was $385,000, a 10.3% increase year over year. However, prices are showing signs of moderating—June’s growth rate was 12.7% annually.

Twenty-two of the 50 largest markets posted lower median listing prices in July compared to a year ago. Still, economists attribute that to the uptick in smaller, more affordable housing inventory.

In 2020, home buyers left states with high taxes and pricey housing in favor of lower-cost metro areas, such as Texas, Florida, North Carolina, South Carolina, Georgia, and Tennessee, according to CoreLogic’s 2020 Hottest Cities for Homebuyers Report.

“The pandemic created a perfect recipe for consistently employed Americans,” said Archana Pradhan, CoreLogic’s principal economist. “If it had been any other mix of events, for example, if low housing inventory was coupled with job inflexibility, we wouldn’t have had such a large group of homebuying consumers feeling empowered to make bold moves in their living situations.”

The top 15 metros on CoreLogic’s hottest cities for home buyers report for 2020 tended to tout affordability with lower costs per square foot, lower property taxes, and no state income taxes. Also, sunny climates that offer lots of outdoor amenities tended to be a big draw.

The 15 metros with the highest inbound migration in 2020 were:

1. Riverside-San Bernardino-Ontario, Calif.
2. Lakeland-Winter Haven, Fla.
3. Myrtle Beach-Conway-North Myrtle Beach, S.C.-N.C.
4. Las Vegas-Henderson-Paradise, Nev.
5. Tampa-St. Petersburg-Clearwater, Fla.
6. Port St. Lucie, Fla.
7. Jacksonville, Fla.
8. San Antonio-New Braunfels, Texas
9. Deltona-Daytona Beach-Ormond Beach, Fla.
10. Dallas-Fort Worth-Arlington, Texas
11. Stockton, Calif.
12. Cape Coral-Fort Myers, Fla.
13. Phoenix-Mesa-Chandler, Ariz.
14. North Port-Sarasota-Bradenton, Fla.
15. Greeley, Colo.

Meanwhile, the cities with the highest outbound migrations in 2020 were New York-Newark-Jersey City, N.Y.-N.J.-Pa.; Los Angeles-Long Beach-Anaheim, Calif.; and San Francisco-Oakland-Berkeley, Calif.

Home renovations have been surging during the pandemic, and homeowners aren’t shying away from major redos either. More than half—55%—of more than 2,000 U.S. homeowners recently surveyed reported making substantial improvements to their homes that they believe will boost their home’s value, according to a July survey commissioned by Selective Insurance and conducted by The Harris Poll. That marks a 25% increase in large-scale home improvement projects reported by homeowners compared to its December 2020 survey results.

The South leads the nation in home improvement projects, the survey found.

Respondents reported the following three “major” home improvement projects since the beginning of the pandemic:

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• Bring Out the Best in Basements

12% are adding a new room

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17% are adding a pool/hot tub

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The survey found that many homeowners are updating their insurance as they upgrade their homes. Among homeowners who improved their homes during the pandemic, only 23% said they hadn’t updated their insurance coverage; another 10% were unsure.

“Every home renovation project is unique, but every homeowner needs to protect their investment from future loss,” said Allen Anderson, senior vice president of personal lines at Selective. He urged homeowners to evaluate their coverage needs—particularly after a renovation—and update their insurance to reflect their renovated home’s full replacement value.

Higher home prices are translating into mega wealth for those who own.

Thirty-four percent of residential properties in the U.S. with a mortgage were considered “equity rich” in the second quarter, which means the combined estimated amount of loans secured by the properties was at least 50% of its estimated market value, according to a new report from ATTOM Data Solutions. The number continues to grow, increasing from 31.2% in the first quarter and 27.5% in the second quarter of 2020.

“The huge home price jumps over the past year that helped millions of sellers earn big profits also kicked in big-time during the second quarter for other owners who saw their typical equity improve more than at any time in the last two years,” said Todd Teta, chief product officer with ATTOM. “Instead of the virus pandemic harming homeowners, it’s helped create conditions that have boosted the balance sheets of households all across the country.”

Every state saw equity-rich levels rise in the second quarter. Western and northeastern states saw the biggest improvement, led by Arizona (up from 16.3% in the first quarter of 2021 to 39.7% in the second quarter), Massachusetts (from 25.3% to 41.7%); New Hampshire (20.4% to 36.1%); and Rhode Island (21% to 36.4%), according to ATTOM Data Solutions’ report. Overall, the states with the highest level of equity-rich homes were Idaho (54.2%) and California (53.8%).

On a metro level, the areas with the highest share of mortgaged properties that were equity rich in the second quarter were:

• San Jose, Calif.: 69.4% equity-rich
• San Francisco: 64.9%
• Los Angeles: 57.9%
• Boise, Idaho: 57.4%
• San Diego: 54.3%

In the Northeast region, Boston had the highest number of equity-rich properties at 43.9% while the South’s leader was Austin, Texas (52.3%). Grand Rapids, Mich., has the highest percentage of equity-rich properties in the Midwest at 37.2%.

Only 4.1% of mortgage homes across the U.S. were considered seriously underwater in the second quarter. That is when the combined estimated balance of loans secured by the property is at least 25% more than the property’s estimated market value.