As the “rebound effect” of investors scooping up cheap properties in the aftermath of the housing crisis wanes, job growth is now playing a bigger part in boosting home prices in U.S. metropolitan areas, according to data released from Trulia. At the same time, rent prices are increasing in markets with above-average job growth.
Home prices in the U.S. were 7.8 percent higher in July from year-ago levels, while rents rose 6.1 percent nationally over the same period, according to the Trulia Price Monitor and the Trulia Rent Monitor, monthly reports that show how listed home prices and rents are trending nationally and locally in the 100 U.S. metropolitan markets.
Job growth is a more sustainable driver of housing demand, and markets with higher list-price gains had faster job growth, according to the report, which compared year‐over‐year asking price gains in July 2014 with year‐over‐year job gains in December 2013 and came up with a “strong and statistically significant” correlation calculation of 0.53. The cities with the largest increases in home prices were Riverside-San Bernardino, California, and Birmingham, Alabama, while the areas with the least were Albany, New York, and Little Rock, Arkansas, where prices actually declined.
For rentals, the median rent for a two-bedroom unit rose faster in higher density areas with more job growth – such as San Francisco and Sacramento, California – than in “sprawling markets” such as Birmingham, Alabama, and Milwaukee.