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Average U.S. rent hits record high for 17th month in a row

The housing market is continuing to put pressure on renters as U.S. rents hit record levels for the 17th consecutive month, with the median rent at $1,879 in the 50 largest metro areas in the country.

Video Transcript

[AUDIO LOGO]

DAVE BRIGGS: Even more evidence today of what many see as a housing rental crisis in this country. Rents hitting a record high in July for the 17th consecutive month. The national median rent hit a new record high of $1,879. That's up 12% according to Realtor.com. And Seana, this is not simply a big city problem any longer.

SEANA SMITH: It certainly is not. There's actually new data out from Realtor.com really showing how much rental prices have increased in the suburbs relative to what we're seeing play out in the big cities. You're not going to get the discount that maybe you would have before the pandemic.

So prepandemic, a suburban renter paid $175 dollars less compared to someone in the city. That gap is now down to $107. So certainly, we have seen this mass exodus from many of our big cities over the last couple of years because of the pandemic.

So Rachelle, it really puts buyers and renters now forcing more people to rent because people simply can't buy those homes that they want to purchase in the suburbs. So you have more and more people settling for rents. And we're seeing that obviously have a huge impact on the rental prices in suburbs today.

RACHELLE AKUFFO: And we've had several analysts say, look, a lot of people are stuck between a rock and a hard place. The mortgage rates continue to rise. But then you're also seeing these rents hitting a record high. We've even seen in Sedona some instances of a lot of people who bought houses to rent them out as Airbnbs, some of these cities now asking them instead to use them as long-term rentals for locals because there just isn't the supply.

And you would think with some of these prices coming down on commodities like lumber, we would begin to see more homebuilding. But that doesn't seem to still be the case. So I think this is gonna be a tight squeeze for a while.

DAVE BRIGGS: You mentioned mortgage rates. And that's a big deal here because a lot of those renters that want to get off the sidelines today saw mortgage rates go up from 5.13 to 5.55, up nearly half point, and that's a huge reason that they're gonna have to stay in the rental situation.

I'll you one bit of good news. Some data just came out under the radar a couple of days ago that showed we will build 420,000 apartments this year. That marks the first time since 1972 the United States will build 400,000-plus apartments in back-to-back years. So at least there is more inventory coming on the market that should help at least keep those numbers flat, if not bring them down a little bit.

And I've talked to a lot of developers, Seana, who are saying they're actually building developments now with the intent not to sell those homes. Small houses that they intend to rent because of these escalating rates.

SEANA SMITH: Yeah, there certainly is an opportunity here. Obviously, we've been waiting for more supply to come onto the market. I think the big question is what it's gonna look like over the next couple of months, right? Until we get that supply--

DAVE BRIGGS: Awful.

SEANA SMITH: --until homebuilders are able to build in order to give potential buyers some more options. So Rachelle, it seems like the housing market is cooling. Certainly, all the data points that we've gotten over the last couple of weeks point to that. The question is, just how quickly we could see the housing market cool. And I think that, obviously, has massive implications, not only for what we see play out in that industry but also for the economy overall.

RACHELLE AKUFFO: And we have to keep in mind, it obviously is cooling regionally. Certain areas really didn't see much growth. We had an analysts say, look, in the Midwest where some prices really didn't budge much at all. But if you're one of these people who, perhaps, wanted to go somewhere warm, you wanted to go to Florida, you want to go to some of the coasts, they're now seeing a reversal.

So it's definitely an interesting space to watch. But I know regionally, some people are still struggling. But obviously, a space we'll continue to watch here on "Yahoo Finance Live."