For both homeowners and renters, housing costs continue to skyrocket.

Average monthly rents increased 13% nationwide over the past year, the highest growth rate in at least two years, according to a new report from real estate brokerage firm Redfin.

The national median monthly mortgage payment for homebuyers posted even bigger growth, climbing 17% since October 2020. 

The 3.2% month-over-month increase in mortgage payments for homebuyers was the largest since April, and more than double the increase during the same period in 2019.

“Fast-rising rents could contribute to inflation woes,” Redfin Chief Economist Daryl Fairweather said in prepared remarks.

“Employees facing higher rents are likely to demand higher compensation from their employers, which could in turn lead to even more inflation down the line. Skyrocketing rents in some of the most desirable cities suggest that there is an overall shortage of homes, and not just of homes for sale.”

The ‘Build Back Better’ bill that is currently being debated by Congress contains $150 billion in spending earmarked for affordable housing, “which could at least begin to address the issue, but the bottom line is that a lot more housing needs to be built in the places that are growing the most,” Fairweather added.

Mortgages Spike Due to Uptick in Rates, Home Prices

Growth rates for mortgage payments and rents had been converging, but an uptick in mortgage rates and home prices caused mortgage-payment growth to accelerate from September to October. 

The 0.4% month-over-month increase in rents was the smallest in eight months, which could just be a seasonal slowdown or may signal some potential relief for renters.

Rent price increases outpaced mortgage payments for new homebuyers in 29 of the 50 largest metro areas in the US during October.