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Rents are coming down for one- and two-bedroom apartments in Des Moines, according to rentals site Zumper.

Why it matters: Affordability concerns are starting to weigh down the booming rental market.

By the numbers: In January, the city's median rent price for a one-bedroom apartment was $910, down 6.2% from last month, Zumper found.

The median two-bedroom rent dropped 5.9% and now cost $960, per the data.

What's happening: Many would-be home buyers chose to rent longer last year, sustaining apartment demand, economists at Moody's Analytics say. But folks are hitting their spending limit.

For the first time in over two decades, households now have to spend 30% of their income on average rents.

Year-over-year rent growth slowed in the second half of the year across the board, "and we expect further deceleration as new supply makes it to market at the same time the labor market softens," senior economist Lu Chen tells Axios.

Zoom out: Rents are already falling in cities that were near the epicenter of the pandemic home-price boom, Axios' Matt Phillips reports.

What we're watching: New apartment construction. The expected surge in supply could help bring down prices.

Yes, but: Experts tell the The Wall Street Journal that most cities will "remain undersupplied with the kind of affordable units that see the highest demand." 

Des Moines rents are cooling off

Affordability concerns are starting to weigh down the booming rental market.

Illustration of apartment doorbells with an intercom shaped like a dollar sign.

Rents are coming down for one- and two-bedroom apartments in Des Moines, according to rentals site <a class="gtmContentClick" data-vars-link-text="Zumper" data-vars-click-url="https://www.zumper.com/blog/rental-price-data/" data-vars-content-id="133162cc-0c94-45a0-a208-d087e1c08c76" data-vars-headline="Des Moines rents are cooling off" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.zumper.com/blog/rental-price-data/" target="_blank">Zumper</a>.Why it matters: Affordability concerns are starting to weigh down the booming rental market.

Real Estate

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Des Moines homeowners looking to sell for top-dollar should be thinking: renovations.

Why it matters: Homebuyers already hampered by gravity-defying prices and mortgage rates don't want to spring for a place that looks like an HGTV "before" photo. (Unless you're actually on HGTV.)

"If the home is ready to go, buyers feel more comfortable biting off the higher payment," local broker Jen Stanbrough tells Axios.

Zoom in: People will wait for their turnkey house. It's one reason Des Moines homes are staying on the market a little longer compared to a year ago, according to local broker Ted Weaver.

Yes, but: That doesn't mean sellers need to cash out to completely redo their kitchen, bathrooms and basement. Installing dome lights and swapping in brushed nickel cabinet pulls or door knobs are easy refreshes, Weaver tells Axios.

It's worth investing in a fresh coat of paint and new flooring, which can set you back $15,000 or $20,000, depending on the size of your house, Weaver says.

The big picture: Self-identified fixer-uppers are typically selling for less, and more slowly, than expected, according to Zillow data shared with Axios.

Across the U.S., listings that mention "fixer-upper" — 0.3% of sales in the first half of the year — sold at a 3.1% discount and took 3.2 days longer to sell relative to expectations, per Zillow data shared with Axios.

Listings pegged as "remodeled" or "renovated," which accounted for 24.1% of U.S. sales, sold at a 1.2% premium and 1.8 days faster than expected.

"Most home buyers right now simply don't have enough money left over to invest in major repairs or remodeling," Redfin deputy chief economist Taylor Marr tells The Wall Street Journal.

By the numbers: More than half of metro Des Moines homes in July were snapped up in two weeks or less, according to Redfin data shared with Axios.

Nationwide, roughly 41% of listings were marked pending, contingent or sold within that window, Redfin found.

State of play: Houses that stay on the market for more than a month are usually overpriced or in need of major work, according to Redfin's Taylor Marr.

We spotted this Fairmont Park home, described as requiring some TLC, with run-down flooring and cabinetry on its last legs. Listed for $205,000, it's spent more than 30 days on Redfin.

Des Moines-area homes go off-market after a median of 13 days, compared to eight days a year ago, per the real estate brokerage.

Be smart: "Fixer-upper" listings comprised 0.2% of sales here in the first half of 2023, per the Zillow data, while those advertised as redone made up 28.5%.

Go deeper: Americans' homes are worth more than ever, but tapping into that value isn't easy

Fixer-uppers are scaring off Des Moines home buyers

We asked local selling experts about fixes worth making.

Illustration of two hammers forming an "X" shape. 

Real estate

Des Moines homeowners looking to sell for top-dollar should be thinking: renovations.Why it matters: Homebuyers already hampered by <a class="gtmContentClick" data-vars-link-text="gravity-defying prices" data-vars-click-url="https://www.axios.com/2023/08/17/housing-prices-affordability-rise-fall-2023-goldman-sachs" data-vars-content-id="19802d0e-4a0d-4d56-a0d6-85f75ecb7a94" data-vars-headline="Fixer-uppers are scaring off Des Moines home buyers" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/08/17/housing-prices-affordability-rise-fall-2023-goldman-sachs" target="_self">gravity-defying prices</a> and <a class="gtmContentClick" data-vars-link-text="mortgage rates" data-vars-click-url="https://www.axios.com/2023/08/22/mortgage-rates-current" data-vars-content-id="19802d0e-4a0d-4d56-a0d6-85f75ecb7a94" data-vars-headline="Fixer-uppers are scaring off Des Moines home buyers" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/08/22/mortgage-rates-current" target="_self">mortgage rates</a> don&#x27;t want to spring for a place that looks like an HGTV &quot;before&quot; photo. (Unless you&#x27;re actually <a class="gtmContentClick" data-vars-link-text="on" data-vars-click-url="https://www.facebook.com/PieTownProductions/posts/738354464957983?ref=embed_post" data-vars-content-id="19802d0e-4a0d-4d56-a0d6-85f75ecb7a94" data-vars-headline="Fixer-uppers are scaring off Des Moines home buyers" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.facebook.com/PieTownProductions/posts/738354464957983?ref=embed_post" target="_blank">on</a> <a class="gtmContentClick" data-vars-link-text="HGTV" data-vars-click-url="https://www.desmoinesregister.com/story/entertainment/television/2023/06/08/hgtv-show-house-hunters-comes-to-central-iowa-with-real-estate-agent-thomas-payne-and-local-couple/70303180007/" data-vars-content-id="19802d0e-4a0d-4d56-a0d6-85f75ecb7a94" data-vars-headline="Fixer-uppers are scaring off Des Moines home buyers" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.desmoinesregister.com/story/entertainment/television/2023/06/08/hgtv-show-house-hunters-comes-to-central-iowa-with-real-estate-agent-thomas-payne-and-local-couple/70303180007/" target="_blank">HGTV</a>.)<ul><li>&quot;If the home is ready to go, buyers feel more comfortable biting off the higher payment,&quot; local broker <a class="gtmContentClick" data-vars-link-text="Jen Stanbrough" data-vars-click-url="https://jenstanbroughrealestate.com/" data-vars-content-id="19802d0e-4a0d-4d56-a0d6-85f75ecb7a94" data-vars-headline="Fixer-uppers are scaring off Des Moines home buyers" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://jenstanbroughrealestate.com/" target="_blank">Jen Stanbrough</a> tells Axios.</li></ul>

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Data: Zillow Economic Research; Map: Tory Lysik/Axios

It'll take Iowans an average of a little over five years to save up for a 10% down payment on a typical home in our state, Zillow data shows.

That accounts for saving 5% of the median household income every month.

Why it matters: Affordability could be a "major driver of cross-country moves," as buyers seek a lifestyle within their means, Zillow economists say.

By the numbers: In the DSM metro, the length of time grows to 6.8 years.

Yes, but: The U.S. average is 8.9 years, with Iowa on the low end and Hawaii as high as 18.4.

Between the lines: The share of first-time buyers in the U.S. has shrunk to a record low as inventory and affordability issues persist, according to the National Association of Realtors (NAR).

First-timers are also waiting longer to buy —  the median first-time buyer age jumped from 33 to 36 nationally from 2021 to 2022, the latest data shows.

Of note: The majority of Americans believe it's the worst time ever to buy a house.

Zoom in: Even so, the majority of millennials in Des Moines own rather than rent — about 73%.

Des Moines bucks some national trends because of its home affordability, Gina Swanson, a realtor for Century 21 Signature Real Estate, previously told Axios.

The big picture: Saving enough for a down payment is the biggest barrier to entry, says Brandi Snowden, a NAR director.

Many would-be-buyers are saddled with debt, including student loans, car loans and credit card debt.

Iowa is one of the cheapest states for home down payments

The majority of millennials in Des Moines own rather than rent — about 73%.

It&#x27;ll take Iowans an average of a little over five years to save up for a 10% down payment on a typical home in our state, <a class="gtmContentClick" data-vars-link-text="Zillow data shows" data-vars-click-url="https://www.zillow.com/research/understanding-affordability-32538/" data-vars-content-id="899ed896-594a-42ae-83c4-a72d20074d84" data-vars-headline="Iowa is one of the cheapest states for home down payments" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.zillow.com/research/understanding-affordability-32538/" target="_blank">Zillow data shows</a>.<ul><li>That accounts for saving 5% of the median household income every month.</li></ul>

Des Moines' market for newly built homes is thriving as fewer homeowners want to sell.

Why it matters: With U.S. mortgage rates at a 22-year high, golden handcuffs are locking up housing inventory, and that's fueling buyers' appetite for new builds, according to real estate experts.

The big picture: Sales of existing U.S. homes, the great majority of houses sold nationally, slid 19% from a year earlier, while new home sales soared 24%, per June figures.

Zoom in: In the Midwest, the sales of both new and existing homes followed — and even eclipsed — the national trend.

The number of newly built homes sold in the region jumped a staggering 58.5% in July compared to a year earlier, per the latest U.S. Census data.

Existing home sales dropped 20% during that same period, according to regional figures from the National Association of Realtors.

What they're saying: New home construction has become more predictable in our metro, following post-pandemic supply struggles.

"You're not having to wait six months for a stove," Ted Weaver, a RE/MAX realtor tells Axios.

State of play: The boost for new builds also comes after rising rates curbed pandemic-driven home buying demand.

Builder confidence is now at its highest level since June 2022, having declined every month that year, according to the National Association of Home Builders.

The big picture: While the Midwest isn't experiencing the same sheer number of new home sales as the South or West, the "slow and steady" pace of the area also protects it from the housing bubbles larger cities, like Phoenix or Salt Lake City, have experienced, Weaver said.

What we're watching: Some builders are offering smaller, more affordable houses to lure first-time buyers, Axios' Matt Phillips reports.

Go deeper: Old houses now cost as much as new houses

Newly built home sales spike in Des Moines and the Midwest

"You're not having to wait six months for a stove."

Housing

Des Moines&#x27; market for newly built homes is thriving as fewer homeowners want to sell.Why it matters: With U.S. mortgage rates at a <a class="gtmContentClick" data-vars-link-text="22-year high" data-vars-click-url="https://www.axios.com/2023/08/17/mortgage-rates-2001-loan" data-vars-content-id="ad3ce33c-dc2c-44ed-aa17-334e79f95606" data-vars-headline="Newly built home sales spike in Des Moines and the Midwest" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/08/17/mortgage-rates-2001-loan" target="_self">22-year high</a>, golden handcuffs are locking up housing inventory, and that&#x27;s fueling buyers&#x27; appetite for new builds, according to real estate experts.

Local experts predict 2023 will bring more normalcy to the Des Moines-area market. Here's what they're saying.

The market will more closely resemble that of pre-pandemic 2019, forecasts realtor Erika Hansen with Coldwell Banker Mid-America. 

Housing inventory will incrementally increase over time, predicts broker Ted Weaver with RE/MAX Concepts. Prices will stabilize, with the pace of price increases slowing considerably, Weaver says.

"Time on market to sell a home will revert back to more 'normal' times, and interest rates, while higher than recent years, should stabilize," Weaver tells Axios.

This year will serve as the bridge back to a more robust housing market in 2024, Weaver says.

"We're entering a bit of a recovery phase right now," says broker Jen Stanbrough with Jen Stanbrough Real Estate. "We're back to an even market — it’s not a seller’s market or a buyer’s market."

Those market shifts will give buyers a chance to breathe and take their time, Stanbrough tells Axios.

Over the summer, Stanbrough recalls going into houses where there may have been 15 other people looking at a house or waiting on the doorstep.

"I had to tell my clients, ‘If you want this house, you have to make an offer today,'" she says. "We saw a lot of buyer's remorse. We're not seeing that now."

Des Moines' 2023 real estate predictions

Stay chill. Des Moines' real estate market is cooling, not crashing.

Illustration of the year 2022, with a keyhole for a zero, which zooms in so you can see through the keyhole to the year 2023.

Local experts predict 2023 will bring more normalcy to the Des Moines-area market. Here&#x27;s what they&#x27;re saying.<h2 class="text-h6 !font-sans !font-normal !leading-[1.2em]">1. Conditions will be less frenetic.</h2>

Sami Sparber

Featured stories

Fixer-uppers are scaring off Des Moines home buyers

Newly built home sales spike in Des Moines and the Midwest

Iowa is one of the cheapest states for home down payments

Des Moines rents are cooling off

Des Moines' 2023 real estate predictions