Asking prices were lower year-over-year for the 14th straight month, though they were only a few dollars cheaper than in September 2023. Apartments cost less across unit sizes, as studios slid by $34 to $1,442 per month, while one- and two-bedroom setups were both $8 more affordable at $1,623 and $1,930, respectively.
Realtor.com
Renting is much more expensive now than it was before the pandemic, as the typical unit's price has risen by $286, or nearly 20%, since 2019. However, Realtor.com economic researchers Jiayi Xu and Danielle Hale pointed out that the same is true of most other goods and services.
"This increase is roughly on par with what has occurred in overall consumer prices (up 22.7% in the 5 years ending September 2024) and pales in comparison to the 50.8% increase in median price-per-square-foot of for-sale home listings in the 5 years ending September 2024," Xu and Hale wrote in their note.
The two continued: "Further, the relative steadiness in rents should translate into slower shelter inflation in the months ahead, alleviating one of the biggest recent drivers of rising prices."
Although rent is down across major US cities, improvements in affordability are far from uniform.
Eight of the 10 real-estate markets with the largest year-over-year drops in rent last month were in the South, led by Nashville's 4.8% drop. Dallas and Denver also each tumbled 4% from 2023.
"While the labor market in the South in areas such as Austin (3.7%) and Birmingham (3.1%) continues to outperform the top-50 average, with much lower unemployment, the rapid growth in new multi-family homes is putting downward pressure on rental prices and cooling the market," Xu and Hale wrote.
Conversely, eight of the 10 metro areas in the Midwest that made Realtor.com's list had higher rent than last September. Chicago and Detroit were the only cities in that region where rent fell. Xu and Hale estimate that a combination of lower starting prices and healthy labor markets likely underpinned that move.
24 cities with cheap rent
Renters hunting for a deal are in luck. Business Insider reviewed Realtor.com's list of the 50 biggest US cities and narrowed it down to the two dozen cities where rent was at least 10% less than the national median of $1,743 last month.
Below are those 24 major US cities, along with each location's median rent in September, the year-over-year and month-over-month changes, and the savings versus the national median rate.
1. Oklahoma City
Gerson Repreza/Shutterstock
Median rent: $1,037
Year-over-year change: 1.9%
Month-over-month change: -0.3%
Discount vs national median: 40.5%
2. Columbus, Ohio
Getty Images
Median rent: $1,217
Year-over-year change: 1.2%
Month-over-month change: -1.1%
Discount vs national median: 30.2%
3. Memphis, Tennessee
Dukas/Christian Heeb/Universal Images Group via Getty Images
The Fed has started cutting rates, but it's not likely to boost the economy much, Lisa Shalett says.
The economy is less rate-sensitive than it was during previous rate cuts, Shalett argues.
Investors should keep an eye on corporate earnings for clues of a soft landing.
Rate cuts have long been seen as an integral part of the Federal Reserve's monetary policy toolbox to juice up the economy.
However, don't expect rate cuts to save the economy this time around, according to Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.
Investors may have reacted positively after the initial 50-basis-point cut, but Shalett believes rate cuts have already been largely priced in from here on out. Beyond the stock market, several parts of the economy aren't very sensitive to interest rate cuts and won't see much upside either.
Today's economy is facing different challenges than it has in past cutting cycles. In an interview with Business Insider, Shalett shared what to expect — and not expect — from this cutting cycle.
3 reasons rate cuts won't work
First, companies today are carrying more cash, resulting in stronger balance sheets.
Many also locked in low borrowing rates after the Global Financial Crisis. The average cost of capital for the biggest companies in the index is only 4.2%, according to Shalett. With less debt, and subsequently fewer interest payments, many S&P 500 constituents aren't that exposed to interest rate risk.
Household consumption also points to reduced rate-cut relief. Wealth is disproportionately concentrated across American households, Shalett said, with the top 40% of households driving two-thirds of total consumption.
"For those households with net savings, high interest rates were actually stimulative," Shalett said. High-income households with extra cash on hand benefited from increased interest income in a higher-rate environment.
One example is baby boomers, many of whom live off of fixed incomes in retirement. "For them, lower interest rates are not stimulative. It's actually net reductive to their incomes," Shalett said.
While lower interest rates could potentially spur consumption for lower-income households, this group makes up only a small portion of overall spending, so don't count on that to materially stimulate the economy, she said.
Lastly, the housing market poses a large challenge for the economy, and Shallett doesn't believe rate cuts will be able to improve the situation.
Lower mortgage rates can help housing affordability, but they won't solve the underlying issue of housing inventory undersupply. According to Shalett, the US is about 4 million housing units short, thanks to a lack of construction after the housing crisis.
In addition to a dearth of supply, how homes are financed also poses an issue.
"Forty percent of the entire housing stock of the US is now owned outright with zero mortgage," Shalett said. That means homeowners are disincentivized to sell into a housing market where mortgage rates — while down from earlier highs — are still hovering around 6%. Many of these homes are owned by retired baby boomers, Shalett added.
Another 36% of the housing market has a mortgage locked below 4%, thanks to record-low pandemic interest rates.
"So the fact that mortgage rates are at 6% today doesn't really create an incentive for those people to transact in the mortgage market," Shallett said. "Seventy-six percent of your entire housing market is frozen and is not moved by the rate cuts."
Keep an eye out for corporate earnings
If rate cuts won't significantly kickstart the economy, then what will?
In Shalett's view, the economy's success hinges on increasing corporate productivity. Shalett recommends that investors closely monitor corporate earnings for the upcoming quarters.
Earnings expectations are already quite ambitious for the next year — Wall Street is forecasting 13-14% profit growth in 2025, a tall order in a slowing economy.
However, a productivity-driven rebound isn't out of the question. Companies are still reporting above-average capital expenditures, and government stimulus will boost areas of the economy such as infrastructure and energy. And the promise of AI could also drive productivity gains. All of these factors could lead the economy to a soft landing.
The median price of single-family homes in San Francisco has nearly doubled since 2014.
Alexandr Spatari/Getty Images
Home prices have soared in the last decade, so buyers get less for their money than they once did.
Although home affordability is an issue, property prices will almost certainly keep rising.
Here are 18 markets with reasonably priced homes that are set for strong price growth.
Million-dollar houses aren't what they used to be, as homebuyers across the US can attest.
Gone are the days when seven-figure sums are automatically associated with massive homes on picturesque properties. In fact, in some of the nation's competitive markets, $1 million is nothing more than the price of admission to home ownership.
US property values have soared since the financial crisis during a widespread housing shortage that created a home affordability crisis for buyers. The multi-decade-high inflation surge during and after the pandemic also contributed to home-price appreciation.
This housing-market boom is best exemplified by major cities in California, like Los Angeles and San Francisco. The median cost of a home in those markets has nearly doubled in the last decade — from $420,300 in 2014 to $854,800 now and $769,600 to $1,449,000, respectively, according to data from the National Association of Realtors cited by real-estate site Zoocasa.
Most homebuyers will be out of luck looking in the Golden State, which has seven of the 10 priciest housing markets in the US and will soon have four cities where the typical single-family home costs more than $2 million — including San Jose, San Francisco's Bay Area neighbor.
Persistent property-price growth means that home affordability will likely remain stretched, even as mortgage rates recede to lower levels. That means buyers may still have limited options.
"As prices creep up higher and higher, future home buyers may look outside of these large metros if income growth doesn't start to keep pace with the cost of housing," wrote Zoocasa's Mackenzie Scibetta in a mid-October report.
Though many families will be priced out of this market, those who can swing a home purchase may want to consider it before property prices rise even further in the coming decade.
"While rising prices may seem daunting, they also offer the promise of long-term equity gains, providing stability and a solid return on investment down the road," Scibetta wrote.
18 top cities for real-estate investors
No real-estate analyst can predict exactly how much or how quickly home prices will rise, though past gains can be a solid harbinger of what's ahead.
With that in mind, Zoocasa researchers compiled data on single-family home price growth from 40 large US markets dating back to 2014, and then extrapolated them out over the next decade to estimate when cities would see their median home prices breach the $1 million mark.
Factors like interest rates and the economic climate will certainly change, though this can be a solid starting point for buyers or real-estate investors who are comparing markets to buy in.
"While growth rates offer a helpful estimate, they may not hold steady if the market experiences drastic changes," Scibetta wrote. "However, they can still provide a general sense of where prices could head in the future."
Of the 40 metropolitan areas used in this analysis, Business Insider limited the list to cities that are within 50% of the US median home price, which was $422,100 in the second quarter, according to the National Association of Realtors. That means the cutoff point was $633,150.
Below are 18 cities with homes that cost $633,150 or less in Q2 that are set to be million-dollar markets by the end of 2035, sorted by which will reach the $1 million threshold the fastest. Along with each reasonably priced real-estate market is its median home price and projections for the years ahead, as well as the home price growth rate from 2014 to 2024 that it's based on.
SambaNova Systeman CEO Rodrigo Liang, Cerebras CEO Andrew Feldman, Foundry CEO Jared Quincy Davis, Groq CEO Jonathan Ross
SambaNova Systems; Ramsey Cardy; Foundry; Groq
All kinds of startups are rushing into the AI inference market.
Inference market competition may lower the price of AI, benefiting builders but challenging clouds.
Not all startups will survive the period of "chaos" to come.
Jared Quincy Davis and his AI computing startup Foundry sell inference. They don't make chips or build large language models. Foundry has a unique method of making cloud computing more efficient. Instead of selling its technology to cloud providers, the Foundry team decided to become one and use its tech to operate a more efficient cloud.
Once companies looking to leverage and sell an AI product have trained their models and know that they perform, they're looking for ease, speed, and value whenever generating outputs. Inference-as-a-service providers like Foundry, aim to simplify the process of generating those outputs.
Foundry offers training and fine-tuning, too, as many cloud providers do, but these days, it seems like anyone with an AI compute-boosting technology is attempting to monetize by selling inference — or more specifically, tokens, the base unit of data in AI.
Cerebras sells inference too. The company's core expertise is designing chips for training and inference, but it recently started selling the latter as a service. So does Groq, a chip company formed by two former Googlers, who recognized early that inference was going to get the bigger share of computing. SambaNova Systems, another hardware platform, also sells inference as a service.
Companies like Lambda, CoreWeave, Together AI, and Crusoe, all close partners of Nvidia, run data centers suited specifically to AI workloads and offer inference services. And then there are the hyperscalers like AWS and Microsoft Azure.
With so many companies specializing in inference, suspicion is rising that the cost of inference is about to drop off a cliff.
"Part of the reason inference is a little commoditizable is customers are kind of paying for tokens at the end of the day," Davis told Business Insider.
The current market for inference is kind of like the electricity market, Davis said. There are a ton of niche sources you can access if you actually shop around, but not everyone does. Most people just want to flip the light switch and have it work.
But there is a lot of nuance to sift through for those willing. For some customers, speed is of the utmost importance. Speed has distinctions too, like time to the first token and tokens per second. There's total job completion time and there are different kinds of inference workloads that lend themselves to different computing setups.
Energy efficiency of the underlying hardware and networking is a big determinant of cost. And cost in inference computing is even more important than in training, Groq cofounder Jonathan Ross recently told BI. Training is an overhead cost, while inference is an operating cost.
Zoom out from all of the intricacies, and inference is becoming the commodity of the AI age.
"Some companies just want output and they don't care about infrastructure," Mitesh Agrawal, head of cloud for Lambda, told BI.
Commoditizing AI
Lambda is in the early stages of an inference-as-a-service offering, but Agrawal said the company is going about it carefully, focusing on providing holistic computing services, and not just tokens.
Inference profit margins can vary widely, Agrawal said. With general compute — where the customer rents fixed capacity — the margins are easier to manage. When you're charging for usage or input and output of a model, the return is less predictable.
Organizing multiple users across a finite number of servers takes finesse. Whether or not the cost of operating the hardware is actually covered with room for profit comes down to how well that organization is done, Agrawal explained.
So why would neoclouds offer the riskier service?
Agrawal said it's about getting potential customers in the door. Inference-as-a-service customers can turn into more traditional compute customers, and as the slate of competitors grows, relationships, and history grow in importance.
Lambda's financial models assume that price cuts are coming soon as more players enter the inference space and chips become more efficient.
A race to the bottom?
How fast the demand for inference is growing is up for debate, but in recent public statements, Nvidia CEO Jensen Huang has said on multiple occasions that new models, like OpenAI's o1, require more compute to generate the same number of responses because they run multiple models to check their own work or "reason." Accuracy, it turns out, requires more compute.
Inference loads are poised to grow, but service providers still anticipate a drop in price from the influx of new players. Davis isn't worried though.
He recalled Jevon's paradox — an economic principle in which a drop in price or an increase in efficiency leads to more total consumption — like when you widen a highway and traffic gets worse.
"If I make something 10 times cheaper, people won't spend 10 times less, nor will they even hold their budgets the same. They'll spend more," Davis said. "That makes sense because what are you doing when you make something 10 times cheaper, you're making the ROI better."
In other words, "it turns out, when you make inference cheaper, people decide to do a lot more inference," Davis said.
The ride ahead could be "bumpy" though, and not all players are likely to survive the moments of mismatch between supply and demand.
"As my old boss at Intel Andy Grove used to say, 'Let chaos reign, and then reign in the chaos'," said Sriram Viswanathan, founding managing partner at Celesta Capital and investor in SambaNova Systems.
He agrees the next few years will be wildly competitive for inference providers, but he believes the winners will be decided on merit.
"The core innovation can't be in the go-to-market, but in the performance and power of the underlying architecture," Viswanathan said.
Many of the companies selling tokens to break into the AI market aspire to more. The chip designers eventually want to sell chips to hyperscalers rather than inference to AI startups. The ultimate version of Foundry's tech is bigger too.
"If we do our job, right, you know, we will be a core part of how every GPU runs," Davis said. All roads, it seems, run through inference.
Hugh Langley contributed reporting.
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The author in economy class, and a British Airways Airbus A380.
Pete Syme/Business Insider; Nicolas Economou/NurPhoto via Getty Images
I flew with British Airways in both the economy (coach) and premium economy cabins.
The upper deck of a BA Airbus A380 means plenty of space, even in economy.
I got a good deal for my premium economy ticket, and I don't think I'd pay more for the amenities.
Premium economy has been gaining popularity with airlines and customers alike, providing a taste of luxury for those who can't afford business class.
I recently flew premium economy in a British Airways World Traveller Plus cabin. At the time I booked, it was actually cheaper than economy class on the same flight.
However, I don't think the benefits are worth much more than flying coach — especially on an Airbus A380.
Flying economy a week earlier, I found plenty of space and a stowage bin next to the window seat thanks to reserving a seat on the upper deck. By contrast, the popularity of premium economy had me sitting in the middle section.
So, if you're looking at paying $1,000 more for premium economy, I'd suggest paying the seat reservation fee and sit in economy on the upper deck instead.
Here's how my two flights compared.
I took two British Airways flights between London and the US — both on an Airbus A380.
An Airbus A380 at the gate at London Heathrow.
Pete Syme/Business Insider
British Airways operates its A380s to six cities in the US — a number second only to Emirates.
It flies the superjumbo jet between London Heathrow and Boston, Dallas/Fort Worth, Johannesburg, Los Angeles, Miami, San Francisco, Singapore, and Washington, DC.
I flew economy from London to Washington Dulles, and premium economy on my return from Dallas/Fort Worth.
My irreverent itinerary came about because I solo-traveled to DC for a couple of days before joining my family in the Canadian Rockies.
Direct flights between Calgary and London were more expensive when I booked. Plus, I wanted to fly British Airways anyway for some frequent-flyer points and to experience the superjumbo jet.
I was particularly excited about these flights because I'd be flying on the upper deck both times.
The author's economy seat to Washington, DC.
Pete Syme/Business Insider
British Airways has 104 economy seats on its A380's upper deck, which most other airlines typically reserve for business class.
The upper deck is arranged in a 2-4-2 configuration in economy, so a window seat means there's one less rowmate to worry about compared to the main deck's 3-4-3.
Window seats on the upper deck cost more to reserve but they have a stowage bin.
Pete Syme/Business Insider
I spent £79 ($104) to choose my economy window seat on the A380's upper deck. Although that's expensive, I think the space and stowage bin made it worth it.
You also get this stowage bin sat in a premium economy window seat, but they were unavailable when I looked to reserve one.
There was plenty of legroom, with space underneath the armrest of the front seat.
Pete Syme/Business Insider
I'm 5-foot-9 so I rarely have to worry about legroom, but I was definitely more comfortable than in a typical economy seat. Sitting here reminded me of the legroom in an aisle seat — without having to worry about passing trolleys or passengers.
Premium economy is normally out of my budget, but I only paid £480 ($630) for that leg.
Pete Syme/Business Insider
When I booked, almost eight months in advance, premium economy was actually slightly cheaper than economy on the same flight. It was also only £100 ($130) more than economy on my alternative route home from Calgary via Chicago.
The price might have been aided by the fact that I was on a connecting route. Prices in November 2024 for premium economy direct from DFW to London are at least $2,400.
There was plenty of space and a footrest, but didn't feel like a huge upgrade from economy.
Pete Syme/Business Insider
There are a few more inches of recline than in economy, but the footrest didn't feel as useful as a legrest would — especially if you want to sleep. You do get a legrest flying premium economy in some newer BA cabins, as well as the likes of Emirates and Singapore Airlines.
I had more legroom than in economy too, but I was pretty much just as comfortable there thanks to being on the A380's upper deck.
BA's Airbus A380s can feel dated.
The in-flight entertainment system displayed a blue screen before being restarted.
Pete Syme/Business Insider
G-XLEK, the first A380 I flew on, is nine years old, while the second was delivered 11 years ago.
That's not especially old, but the cabins aren't British Airways' most modern. Its A380 business class is configured in a 2-3-2 formation, whereas you'll find a more comfortable 1-2-1 on some of its Boeing 777s and 787s.
One flight was delayed as the captain restarted the malfunctioning in-flight entertainment before takeoff.
I was impressed by the friendliness of the cabin crew on both flights.
The author's drinks and snacks in economy.
Pete Syme/Business Insider
Shortly after takeoff, I got a bag of pretzels and two drinks — one of which was to go with the meal.
In premium economy I had an orange juice after takeoff, but the service didn't feel much different.
The author's perspective in premium economy, with the passenger in front reclined.
Pete Syme/Business Insider
On my flight, there was no sparkling wine on offer after takeoff as advertised. The choice was orange juice or water.
However, premium economy does have more drink options with three cocktails on the menu — a Gin Fizz, Bloody Mary, or Citrus Twist — but I opted for beer.
The entertainment screen was slightly bigger, but the IFE was too glitchy for me to use it properly. Premium economy also included a better set of headphones, in contrast to economy's earbuds.
I was excited to try the food in premium economy, with menus handed out after takeoff.
The premium economy food menu.
Pete Syme/Business Insider
This touch of luxury is definitely an upgrade from economy, with one more main course on offer.
I opted for the butter chicken.
A meal tray including pearl barley salad, panna cotta, and a curry in premium economy.
Pete Syme/Business Insider
Dessert, the tropical panna cotta, was the highlight of the meal for me, and much tastier than in economy. But I couldn't say the same for the curry.
I actually preferred the chicken tikka masala curry I had in economy.
The author's meal in economy.
Pete Syme/Business Insider
In premium economy, I did enjoy the metal cutlery and china plates, but it didn't feel like much different from the wooden cutlery in economy. Perhaps this was because all the courses came at once, unlike in business class.
Premium economy also came with an amenity kit, but I was hoping for more.
Pete Syme/Business Insider
The kit came with a sleep mask, socks, a toothbrush, toothpaste, lip balm from Scaramouche + Fandango, and — somewhat pointlessly in my opinion — a biro.
I liked the design of the bag, it was nice to prepare to sleep by brushing my teeth in the bathroom, and the lip balm was hugely helpful.
However, I think a kit more similar to business class, with moisturiser and aromatherapy oils, would've helped sell me on premium economy.
I hoped premium economy would help me sleep on my redeye flight, but to no avail.
The World Traveller Plus blanket.
Pete Syme/Business Insider
I've never found it easy to sleep on planes, and I probably didn't help myself by drinking beer instead of water onboard.
The blanket was better than the one given in economy, but the lack of legrest and limited recline made me wish I could afford a lie-flat bed.
At the end of my economy flight, I had a chicken and tomato pastry and an apple juice.
The snack in economy.
Pete Syme/Business Insider
It was pretty tasty and better than I expected.
It was a similar idea for breakfast in premium economy, where I had an egg bagel and a coffee.
Breakfast in premium economy.
Pete Syme/Business Insider
Again, it was tasty, but I didn't feel the food service was worth upgrading from economy. In business class, breakfast is served on plates.
Despite getting a good deal for premium economy, I had a more enjoyable flight in economy.
The view taking off from London Heathrow.
Pete Syme/Business Insider
Perhaps this was because my economy flight wasn't a redeye and I had my favored window seat — but I think it largely came down to the abundance of space on offer on the A380's upper deck economy seats. Paying the seat reservation fee felt like an upgrade in itself.
If you spot a good deal, premium economy is definitely an enjoyable experience that gives you a taste of luxury.
But if you're looking at paying over a grand, I'd consider upgrading to business class or, on an A380, seeking an upper-deck economy seat for extra space.
