New England housing markets are heating up

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New England housing markets are heating up link

• 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.

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.