This Area With the Most Apartment Units Under Construction

Home Prices Still Growing – Just at a More Normal Pace link

• Home prices are not falling; they are just growing at a more sustainable pace. This return to normal seasonality in the housing market is a positive sign, indicating a shift from the rapid price growth seen in recent years.

• Seasonality in the housing market leads to predictable patterns in home price appreciation. Prices typically increase more during the spring and summer, the peak homebuying seasons, and grow at a slower pace during the cooler months.

• Misconceptions about falling home prices often stem from unreliable sources and misrepresentative media coverage. Real data shows that while the pace of growth is slowing, it is aligning with long-term market trends, which is more sustainable.

Share of mortgage-free homeowners hits all-time high in 2022 link

• In 2022, nearly 40% of U.S. homeowners owned their homes outright, a significant increase from a decade ago. This rise is attributed to factors like lower mortgage rates and increased home equity levels.

• Homeowners aged 65 or older represent a substantial portion of this group, owning 33% of the 84.6 million owner-occupied homes. The baby boomer generation plays a significant role in this trend, with even higher homeownership rates expected among them.

• The trend of mortgage-free homeownership has been influenced by drops in mortgage rates and opportunities for refinancing. Many homeowners have switched to shorter-term mortgages, such as 15-year loans, enabling faster payoff at lower rates

Mortgage Demand Jumps to Six-Week High as Interest Rates Continue to Drop link

• Mortgage applications increased by 3% last week, marking the highest level in six weeks, driven by a decrease in interest rates. The average rate for 30-year fixed-rate mortgages dropped to 7.41%, the lowest in two months.

• Refinance applications rose 2% from the previous week, yet they were only 4% lower than the same period last year. The current rates are about 75 basis points higher than a year ago but more than double the rates two years ago during the refinance boom.

• The housing market remains weak despite the uptick in mortgage demand. October sales of existing homes fell to the lowest level in 13 years, reflecting the ongoing challenges in the real estate sector.

SFR Rent Growth Slows to the Lowest Level in Three Years link

• Single-family rentals (SFRs) experienced a significant slowdown in rent growth, marking the 17th consecutive month of this trend. As of September, the growth rate was the lowest in three years, yet there was still a national average increase of 2.6%.

• The impact of this slowdown varies across different local markets. For example, St. Louis saw the highest year-over-year rental cost hikes, while Miami, previously leading in rent increases, witnessed a decline in prices.

• Despite the overall slowdown, some markets continue to show strong performance. Affordable metro areas, in particular, are gaining momentum, indicating a complex and varied landscape in the SFR market.

Student Housing Off to Strong Start for 2024-25 School Year link

• Preleasing for the 2024-25 school year has reached 25.2% in October, surpassing last year's record pace of 10.4%. Major universities like the University of Tennessee, the University of Wisconsin, and Clemson are already 60% to 70% preleased, indicating high demand for student housing.

• Rent growth in October was 6.6%, up from 4.7% a year ago, with the average asking rent per bed at $854. This growth varies by market, with 37 markets in the Yardi 200 experiencing double-digit growth, averaging 15.1%.

• Enrollment numbers for fall 2023 show a rebound, benefiting the student housing market. Final occupancy for the Yardi 200 markets was 94.6% in September, slightly lower than 96.2% in September 2022. However, investment activity in student housing has decreased due to high interest rates, with only 66 dedicated student housing properties sold this year compared to over 200 last year.

Wave of Loan Maturities Signals Looming Office Distress link

• The U.S. office market is facing a significant challenge with $920 billion in debt, of which over 16% is maturing by the end of next year. This situation is exacerbated by a high national vacancy rate of 17.8%, up from 13.4% pre-pandemic.

• Manhattan leads in debt volume with $174.5 billion, while smaller markets like Raleigh–Durham and Nashville have around $7 billion each. The impending debt maturities signal increased distress, particularly in markets like Houston, where nearly 30% of loans are due next year.

• The distress in the office market is evident with a sharp increase in delinquent CMBS loans, now at 5.8%. This is a significant rise from the previous year and reflects a broader trend of declining investment in office loans, with a 75% year-over-year drop in securitized office loans.