Home sales fell to a 13-year low in October as prices rose

Industrial Sales Lowest Since 2017 link

• Industrial real estate, once a highly sought-after sector, is experiencing a downturn. High valuations and escalating rents, driven by global supply chain issues and e-commerce growth, are no longer sustainable.

• JLL's Q3 U.S. industrial outlook indicates a significant collapse in capital market activity. This shift suggests a normalization of the previously extraordinary demand in the industrial real estate market.

• The change in industrial real estate dynamics reflects broader economic trends. Temporary factors that boosted the sector, such as supply chain disruptions, are beginning to ease, leading to a slack in demand.

Yardi Says Supply Growth Pushes Multifamily Rents Down link

• The average U.S. multifamily rent reached $1,718 in October 2023, influenced by robust apartment demand and a strong economy. Despite rising interest rates and predictions of a recession, the economy grew by 4.9% in the third quarter and added nearly 300,000 new jobs monthly through October.

• Homeownership is becoming increasingly unattainable as mortgage rates soar, further bolstering the demand for multifamily apartments. This trend reflects a shift in housing preferences, with more people opting for rental housing in the face of economic uncertainties.

US Annual Rent Growth Relaxes for the 17th Straight Month in September, CoreLogic Reports link

• In September, U.S. single-family rent prices increased by 2.6% year over year, marking the lowest growth rate in about three years. This slowdown reflects a return to pre-pandemic rent growth rates, with a slight decrease from August to September aligning with historical seasonal trends.

• Lower-priced rental homes have seen higher growth rates compared to high-priced tiers over the past three years. In September 2023, the lower-priced tier experienced a 3.6% increase, significantly down from 12% in the previous year, indicating a notable shift in the rental market dynamics.

• St. Louis leads the nation in annual rent growth, while cities like Austin, Las Vegas, and Miami are witnessing declines. This variation highlights the diverse rental market conditions across the U.S., with some regions experiencing continued growth and others facing a downturn in rental prices.

Are There Actually More Homes for Sale Right Now? link

• Recent data shows a slight increase in housing inventory, with a national growth of just over 5% last month. However, this increase is still minimal compared to pre-pandemic levels, indicating that the housing market is far from a full recovery in terms of available listings.

• The current housing market situation remains challenging for buyers due to persistently low inventory levels. Prospective buyers may find slightly more options than in recent months, but they still need to prepare for a competitive market with limited choices.

• For sellers, the market conditions continue to be favorable. Despite a slight uptick in inventory, the overall supply remains low, potentially leading to quick sales and multiple offers, especially in areas where inventory is even more constrained.

Volume of CMBS Delinquency Increased 49.4% During 10 Months Through October link

• CMBS loan delinquencies surged by 49.4% in the 10 months leading up to October, reaching $27.91 billion. This increase represents 5.07% of the total $601.98 billion CMBS universe tracked by Trepp, a significant jump from the 3.03% delinquency rate at the end of the previous year.

• The office sector was the primary driver of this increase, with delinquency volumes in this sector rising by 261%. By the end of October, 199 office loans totaling $9.59 billion were at least 30 days late, marking a substantial increase from the end of last year.

• Despite the overall rise in delinquencies, some property types showed improvement. The volume of retail loans classified as delinquent decreased by about 12% to $7.48 billion. However, the hotel sector experienced a sharp decline in the number of delinquent loans, but their dollar balance increased by 4.62%.

Home sales fell to a 13-year low in October as prices rose link

• In October 2023, sales of previously owned homes dropped 4.1% from September, reaching a seasonally adjusted annual rate of 3.79 million units, the lowest since August 2010. This decline was sharper than analysts' expectations, with sales falling 14.6% year over year.

• The average rate on the 30-year fixed mortgage surged over 8% by mid-October, contributing to the sales slump. Despite this, the median price of an existing home sold in October was $391,800, marking a 3.4% increase from the previous year and continuing a four-month trend of rising annual price increases.

• The housing market faced a tight supply, with only 1.15 million homes available for sale at the end of October, a 5.7% decrease from the previous year. This shortage, along with high mortgage rates, created challenging conditions for prospective buyers, particularly in the starter and mid-priced home segments.