November market trends report

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Homebuyer demand for mortgages jumped 6%, as interest rates fell to the lowest level in over a month link

• Mortgage applications to purchase a home rose 6% last week, the highest since January, driven by a drop in 30-year fixed mortgage rates to 6.69%. This marks the lowest rate in over a month, providing some relief to prospective buyers.

• Total mortgage application volume increased 2.8% compared to the previous week, reflecting a mix of higher purchase activity and lower refinance demand. Applications to refinance declined 1% and were down 7% from last year.

• The housing market is benefiting from higher inventory levels and slightly lower rates, giving buyers more options. Despite the improvement, purchase applications remain 21% lower than the same period last year due to ongoing affordability challenges.

Net lease investors eye cross-border opportunities and new property types in 2025 link

• Mexico is a growing focus for net lease investors, especially in sale-leaseback and build-to-suit projects driven by new manufacturers. W. P. Carey highlights Mexico and Canada as key areas for geographic expansion beyond the US and Europe.

• Emerging property types, like data centers and healthcare facilities in urban areas, are gaining traction due to demand and demographic advantages. These assets are being targeted for long-term leases to ensure stability.

• Interest rate volatility remains a critical challenge, impacting asset pricing and investment strategies. Public REITs like W. P. Carey see opportunities in this volatility to remain competitive in deal-making.

November 2024 monthly housing market trends report link

• Active home listings rose 26.2% year-over-year, marking the 13th straight month of growth, but remain 21.5% below pre-pandemic 2017-2019 levels. Regions like the South and West saw the smallest inventory gaps compared to historical norms.

• Median listing prices dropped 0.7% to $416,880, but the price per square foot rose 1.6%, driven by more smaller, affordable homes entering the market. Price reductions fell, with only 16.7% of sellers cutting prices, down from 18.0% last year.

• Homes spent 62 days on the market, 11 days longer than last year and the slowest November since 2019. Tampa, Rochester, and Orlando saw the largest increases in time on market among major metro areas.

Office and multifamily rolling ahead in sales volume link

• Office and multifamily sectors are showing resilience, with each posting an 18% year-over-year increase in sales volume. Office sales alone reached over $5 billion in October, with CBD transactions up 55% compared to last year.

• Multifamily led with five consecutive months exceeding $10 billion in sales, driven by significant portfolio deals like Scion Group’s acquisition of a 14-property student housing portfolio. The sector’s consistent rebound signals broader recovery in investment activity.

• Portfolio transactions are outperforming single-asset deals, with a 24% year-to-date increase in activity. Notable industrial deals, including a major biomanufacturing transaction, have pushed the average deal size to its highest since mid-2022.

A ‘silver tsunami’ won’t solve housing affordability challenges

• Empty nest households, which grew to 20.9 million in 2022, are mostly in affordable Midwest and Southern markets. This surplus does little to address housing shortages in expensive coastal cities with high demand.

• The largest shares of empty nest households are in Pittsburgh (22%), Buffalo (20%), and Cleveland (20%), but these areas lack young home-buying populations. Conversely, cities like Austin, Seattle, and Denver have high demand but fewer empty nesters (below 16%).

• Building more housing remains the most effective solution, especially in markets with restrictive land-use policies. Denser construction and assistance programs for buyers could significantly improve affordability.

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Vidit

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