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- New England housing markets are heating up
New England housing markets are heating up
Plus, Grandparents Moving To Be Closer to Their Grandkids, Prolific Growth Seen in Two DC Urban Core Submarkets and more
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Macro Trends
New England housing markets are heating up link
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Home prices nationwide increased by 3.7% year over year in August 2023 compared to August 2022, with a month-over-month increase of 0.3% from July 2023 to August 2023.
CoreLogic's Home Price Index indicates a month-over-month increase of 0.2% from August 2023 to September 2023 and a year-over-year increase of 3.4% from August 2023 to August 2024.
New England housing markets are heating up, with states like New Hampshire, Maine, Vermont, and Rhode Island witnessing the largest year-over-year price gains in August 2023.
U.S. Employment Growth Stronger Than Expected in September link
U.S. employers added approximately 336,000 jobs in September 2023, doubling economists' predictions of +160,000 to +170,000 jobs. This was the most significant month-over-month increase since January 2023.
Revisions to job counts for July and August 2023 showed an additional 119,000 jobs than previously reported, with July adding 79,000 more jobs and August increasing by 40,000 jobs.
Despite the challenges, the U.S. economy has regained all the net jobs lost during the COVID-19 pandemic. As of September, the nation had about 4.5 million more jobs (+3%) compared to the pre-pandemic employment level from February 2020.
Real Estate Trends
U.S. Northeast is Experiencing Rent Growth link
The Northeast has seen significant apartment rent growth recently, marking its largest lead over the rest of the U.S. in over a decade.
Data from RealPage indicates that Northeast average effective asking rents rose by 3.1% in September 2023 compared to September 2022. In contrast, the national average increase was only 0.1%.
The 3.1% rent growth in the Northeast is still below its 10-year average, which stands at approximately 3.5%.
Multifamily Cap Rate Spread Smallest Since 2014 link
The average prime multifamily cap rate has increased by 155 basis points to 4.92% since Q1 2022.
This rate is 70 basis points higher than the pre-pandemic average of 2018-2019.
CBRE predicts that underwriting assumptions for prime multifamily assets are nearing their peak, with potential for further expansion if the Federal Reserve raises rates or long-term rates continue to rise.
Apartments' Record Demand Still Can't Overcome Supply link
Developers are delivering record numbers of units, but there aren't enough new renter households to occupy them, as highlighted in Apartments.com’s Q3 2023 rent growth trends report.
Supply and demand imbalances persist, especially in rapidly growing Sun Belt markets.
In contrast, markets in the Northeast and Midwest have shown positive trends, ranking among the top for rent growth.
Current State of the Housing Market; Overview for mid-October link
Most house price measures have shown a rise over recent months. A significant question raised in July was whether house prices would decline further later this year.
The NAR reported that median prices increased by 3.9% YoY in August, a jump from 1.7% YoY in July. Similarly, ICE/Black Knight reported a 3.8% YoY rise in August, up from 2.4% YoY in July, reaching new all-time highs. Freddie Mac also reported a 4.0% YoY increase in August, up from 2.9% YoY in July.
The FMHPI and NAR median prices seem to be leading indicators for the Case-Shiller index. Based on recent data, the YoY change in the Case-Shiller index is expected to rise further in the August report.
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