Apartment Supply Surges to Highest Levels Since the Mid-1980s

Mortgage Rates Sit Still in the First Week of 2024 link

• In early 2024, mortgage rates remained relatively stable, hovering around the mid-6% range. The 30-year fixed-rate mortgage averaged 6.62% as of January 4, showing a minor increase from 6.61% at the end of December.

• The 15-year fixed-rate mortgage experienced a slight decrease, averaging 5.89% compared to 5.93% the previous week. This stability follows a significant drop in the 30-year fixed-rate mortgage, which plummeted more than a percentage point between late October and mid-December.

Housing Market Update: Homebuyers’ Monthly Payments Drop to Lowest Level in Nearly a Year, Bringing Back Some House Hunters link

• The median U.S. housing payment decreased by nearly $400 from its peak in October, reaching its lowest level in almost a year. This reduction is enticing previously sidelined buyers to re-enter the market.

• Redfin's Demand Index, a measure of early-stage housing demand, has risen by 10% from a month ago, indicating a resurgence in buyer interest. This increase is attributed to lower mortgage rates and a greater selection of homes.

• Despite a 14% drop in median mortgage payments, the overall housing market shows signs of stabilization. Pending sales are down just 3% annually, marking the smallest decline in two years, reflecting a cautiously optimistic outlook for the housing market.

2024 Multifamily Property Management Trends link

• Multifamily housing is increasingly adopting 'flex strategies' to boost occupancy. Offering shorter leases and flexible terms appeals to a diverse range of tenants, including tourists and digital nomads, making properties more resilient to economic downturns.

• The trend of allowing subletting is gaining momentum, with platforms like Airbnb's apartment program facilitating this. This approach benefits both residents and operators by enhancing financial viability and reducing vacancy risks.

• Mixed-use developments are becoming more popular, catering to the changing work patterns and environmental consciousness of renters. These developments offer a blend of amenities, retail spaces, and workspaces, fostering a community-centric, sustainable living environment.

These U.S. Markets Saw the Most Rent Growth in 2023 link

• In 2023, Cincinnati led the nation's 50 largest apartment markets in rent growth, achieving a 3.9% increase. This growth is notable in a year where half of these markets experienced rent cuts.

• Major metros with manageable supply activity over the past five years, especially in the Midwest, have seen price increases. These areas have maintained stable occupancy levels, contrasting with other regions struggling to match apartment demand with completion volumes.

• Among the top performers, Boston, Chicago, and Newark also recorded annual rent increases exceeding 3%. Midwest cities like St. Louis, Milwaukee, Cleveland, and Indianapolis, along with Anaheim and Washington, DC, closely followed with growth near 3%.

Maine Becomes Attractive Relocation Destination Among East Coast Hubs link

• Maine has emerged as a popular migration destination, particularly noted for its low crime rate and promising job market. Between August 2019 and August 2023, the state experienced a net increase in domestic migration.

• This migration trend has led to a 2.7% population increase in Maine. The state's appeal is attributed to various factors, including quality of life and employment opportunities.

• The report from PlacerAI highlights Maine's growing significance among East Coast migration hubs. This shift reflects changing preferences and priorities among Americans in choosing where to live and work.

Apartment Supply Surges to Highest Levels Since the Mid-1980s link

• Apartment supply in 2023 reached a 36-year high, with nearly 440,000 units completed. This surge in supply, a result of projects started during peak occupancy rates and rent growth, has led to a challenging leasing environment and flattened rent growth.

• Despite a strong demand rebound in 2023, including a surprisingly robust fourth quarter, demand couldn't keep pace with the high supply levels. This mismatch resulted in a year-over-year occupancy drop to 94.1% and the second-weakest annual rent growth since 2009.

• The distribution of supply and demand varied regionally. The Sun Belt and Mountain regions saw the most new supply and demand, while the West Coast lagged in demand. Florida experienced significant rent cuts due to rising supply, contrasting with rent increases in low-supply Midwest and Northeast markets.