Top Short Term Rental Markets

In partnership with

New here? Join the newsletter (it's free).

Inflation surges back up to 3%  link

• Inflation rose to 3% in January, up from 2.9% in December, marking the fourth consecutive monthly increase. Core inflation, which excludes food and energy, climbed 3.3%, with higher costs in car insurance, medical care, and airfare.

• Mortgage rates, which follow Treasury yields, are expected to climb after the 10-year Treasury note surged 10 basis points. The 30-year fixed home loan averaged 6.89% last week and has hovered near 7% since January.

• Housing costs remain a key driver, with the shelter index rising 4.4% year-over-year, though it's the lowest in three years. Housing accounted for nearly 30% of the monthly inflation increase, but slower home price growth and rent declines may ease pressure.

The growing number of retirees link

• Every day, 11,500 people turn 65 in the U.S., while in China, the number is nearly three times higher at 32,000. Japan and Germany see 4,000 and 3,300 new retirees daily, respectively.

• The rapid increase in retirees worldwide is putting pressure on retirement savings systems. Governments and financial institutions need to adapt to ensure long-term financial security for aging populations.

• With longevity increasing, the strain on pensions, healthcare, and social services is expected to grow. Policymakers must address funding gaps to avoid future shortfalls.

New projections signal a slowdown: Harvard link

• Household growth is projected to slow significantly, with only 8.6 million new households forming between 2025-2035, far below past decades. Growth from 2035-2045 is expected to drop further to just 5.1 million, the lowest in 100 years.

• Aging demographics will drive a major shift, with households headed by people 80+ increasing by nearly 60% over the next decade. This will create high demand for senior housing and services while also leading to more household losses due to mortality.

• Slower household growth means lower demand for new housing, with construction dropping from 1.4 million units per year to 1.1 million in 2025-2035. In a low-immigration scenario, demand could shrink further to just 610,000 units per year in 2035-2045, well below past decades' norms.

Small market rent growth outperforms larger metros link

• Smaller apartment markets saw 1.4% rent growth at the end of 2024, compared to just 0.1% in the nation’s 50 largest metros. Cities like Fort Collins, CO, Salinas, CA, Providence, RI, and Oklahoma City, OK led this trend.

• The trend has held steady since mid-2023, with smaller markets proving more resilient during downturns. They don’t see the same extreme rent declines as large metros but also miss out on the big booms.

• Lower inventory growth rates contribute to stronger rent growth in smaller cities. These markets have steadier performance and avoid the volatility seen in major metros.

Investment Volume Rises; Debt Fundamentals Improve

• Commercial real estate investment volume jumped 31% year-over-year in Q4, reaching $121 billion. The total annual volume increased by 8% to $392 billion.

• Private investors led the market with $70 billion in Q4 transactions, while institutional investors followed with $24 billion. Cross-border investment grew 15% year-over-year, with industrial and office sectors driving demand.

• Banks dominated non-agency lending, making up 43% of Q4 loan closings, while life insurance companies and alternative lenders accounted for 33% and 23%, respectively. Commercial and multifamily loan spreads tightened by 49 and 36 basis points compared to last year.

• link

Austin asking rents drop 16% in January—more than any other major metro link

• Austin saw the biggest rent drop among major U.S. metros, falling 16% year over year to $1,399. Rents in the city are now 22.2% below their August 2023 peak of $1,799.

• Tampa (-8.2%), Salt Lake City (-6.5%), Jacksonville (-6.4%), and New York (-5%) also saw major rent declines. Texas and Florida metros are dropping fast due to high housing construction, while Florida’s natural disasters may also be pushing some residents away.

• On the flip side, rents surged in Cincinnati (15%), Providence (13.4%), Louisville (10.5%), Baltimore (10.2%), and Washington, D.C. (8.8%). Rising home prices and mortgage rates are keeping more people renting, which could eventually push rents higher.

Top Short-Term Rental Markets

Top 10 U.S. Counties Most Affordable for Owning a Home in 2025

Where are we in the housing cycle? A consulting study

CRE Distress Trends

People Are Flocking to These 4 Desirable Cities—as Homeowners’ Sale Prices Skyrocket

National Student Housing Report

List of Proptech Startups That Just Got Funded

Visualizing the Daily Scroll of the Average Social Media User 😎

Not for me, but for someone!

Link to the listing

That's all folks. Let me know what you think of the email. Quite a lot went into it. If these emails aren't for you anymore, you can unsubscribe here.

Cheers,

Vidit

Instagram

P.S - Read past newsletters here