Mapped: How Much of Each U.S. State’s Population Lives in Cities

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Quantifying What Fed Cuts Mean for GDP and Inflation

• A 100 basis points cut in the Fed funds rate this year, along with an additional 150 basis points in forward guidance for future cuts, could increase GDP by 2% and inflation by 1%. These figures are based on a simplified model of the U.S. economy, FRBUS.

• The anticipated rate cuts could also significantly impact financial markets, boosting stock prices, narrowing credit spreads, and driving higher consumer and capex spending, as well as corporate earnings.

• The Fed’s current approach, which seeks to normalize the Fed funds rate to around 3%, may underestimate the broader economic effects, particularly the potential for reaccelerating growth and inflation amidst ongoing fiscal stimuli and AI investments.

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Single-Family Rents Continue to Hold Steady link

• Washington D.C. led the nation with a 6.5% year-over-year rent increase in June 2024, reflecting strong demand in the metro area. Seattle and New York followed closely with 6.1% and 5.4% increases, respectively.

• Lower-priced rental properties saw a smaller growth of 1.9%, while higher-priced properties experienced a 3.1% increase, showing a stronger demand at the high end of the market. This trend is reversing the previous year's pattern where low-end properties grew faster.

• Nationally, single-family rents are stabilizing around the pre-pandemic growth rate of 3%, with a 2.9% increase year-over-year in June 2024. Median rents have risen over $300 in the past two years, signaling continued pressure on housing affordability.

Rent to Income Ratio Trends link

• The national rent-to-income (RTI) ratio declined to 26.8% in Q2 2024, down from 27.8% a year earlier, reflecting modest rent growth and a 3.7% rise in median household income. However, New York saw its RTI rise to 57.7%, the highest in the U.S., driven by a rent increase to $4,186 and stagnant income growth.

• Income required to rent comfortably in the most expensive states has risen sharply, with New York leading at $135,637 annually, a 22% increase since 2019. Massachusetts and Washington, DC, also rank high, with median incomes unable to cover average apartment rents without burden.

• States like New Mexico and Iowa have made strides in affordable housing, with 14% of their inventory being affordable units, contrasting with Florida and New York, where less than 11% of housing is affordable, exacerbating rent disparities.

Mid-Year Retail Performance Review link

• Hartford, CT led all markets with a 1.72% YTD increase in effective revenue per square foot (SF), while Albuquerque, NM, saw the steepest decline at -3.26%. This highlights the regional disparities in retail performance across the U.S.

• The Northeast region showed the strongest performance with a 57 basis points (bps) increase in effective revenue per SF, closely followed by the Southwestern region at 56 bps. The Midwestern region lagged, recording the slowest growth at just 15 bps.

• Cleveland, OH's retail revenue growth was driven mainly by occupancy gains rather than rent increases, with a significant 14.6% discount between asking and effective rents. This was the largest discount among the top-performing metros, compared to a national average discount of 12.5%.

Inventory is declining in key markets link

• Housing inventory in major U.S. markets is shrinking, leading to increased competition among buyers and pushing home prices higher. Cities like Los Angeles, Phoenix, and Austin have seen significant drops in available listings.

• This inventory crunch is attributed to potential sellers holding off due to higher mortgage rates, which disincentivizes moving and listing their homes. Current homeowners are reluctant to trade in their low-rate mortgages for newer, more expensive ones.

• Builders are not keeping up with demand, which is exacerbating the inventory shortfall. This mismatch is contributing to a highly competitive market, especially in cities where population growth is strong.

The Wealthy Are Bringing Big Money and Luxurious Lodges to Maine’s Lakes

• The median sale price for a lakefront single-family home in Maine skyrocketed by 72.9% from 2019 to 2023, reaching $415,000, and this year it stands at $430,000. High demand and limited turnover are driving prices up.

• Wealthy homeowners are increasingly replacing modest camps with luxurious lodges, especially on lakes like Sebago and Moosehead.

• The influx of wealth has altered the character of Maine's lake towns, with higher taxes and living costs pushing out long-time residents. The new construction boom has also caused clashes over environmental regulations and local zoning laws, adding tension to the community.

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Vidit

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