Rents are getting lighter as Gen Z hopes to own a home — and the best time to buy remains up in the air

The federal government shutdown has now passed the two-week mark, pausing data release and likely delaying the closure of some homes. The September inflation report which was originally scheduled for release this week, will be released this Friday, October 24th.

While it is difficult to say what the overall trend will be, I expect housing inflation to have declined further. September’s rental report showed another month of easing in asking rents, which are now down 3.2% from their 2022 peak.

This has modestly improved housing affordability across the country, and especially in Austin, Texas, the new most affordable rental market.

In contrast, the average asking rent in the New York metro area exceeds the recommended 30% threshold for an average household, and within the city rents continued to rise in the third quarter.

This is one reason why housing affordability has been a prominent issue in New York City mayoral elections. Rising rents mean that a household with a monthly budget that matches the typical Manhattan rent can afford to buy a home above the median in four nearby cities popular with New York home buyers.

In a recent survey of Gen Z homeowners and hopefuls, respondents reported feeling challenged, but not discouraged, by the current housing market. While 82% say buying a home is more difficult for their generation, nearly three-quarters of respondents are actively saving for a down payment.

In the weekly housing data, we saw an increase in the number of new homes on the market compared to recent weeks, which could indicate more seller involvement. It was enough to cause a modest uptick in active listing growth and average listing prices, which remained little changed from last year.

Mortgage rates fell this week, marking a sixth week below 6.5%. Lower rates could improve home sales even without an increase in seller interest given current inventory levels, but the government shutdown could be a compensating, albeit temporary, drag.

The NAHB Wells Fargo housing market indexa measure of builder confidence, improved in October as current sales, forecast sales, and buyer traffic all improved. This data suggests that single-family home permits also rose modestly in September, although we won’t have this data, which is typically published each month by the US Census Bureau, until after the government reopens.

Finally, we’re just wrapping up the best time to buy nationwide, but conditions are still quite good in most major metros and a handful of markets where shoppers can even anticipate next week’s peak.