U.S. Foreclosure Activity Continues to See an Annual Increase

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“When another blames you or hates you, or people voice similar criticisms, go to their souls, penetrate inside, and see what sort of people they are. You will realize that there is no need to be racked with anxiety that they should hold any particular opinion about you.”

― Marcus Aurelius, Meditations

U.S. Job Growth Continues to Surpass Expectations link

• The U.S. job market added 275,000 workers in February 2024, surpassing the anticipated 200,000 and marking one of the highest one-month gains since May 2023. This performance comes despite downward revisions for December 2023 and January 2024, showing a combined reduction of 167,000 jobs from previous reports.

• As of February 2024, the U.S. has fully recovered and surpassed pre-pandemic employment levels, with nearly 5.5 million more jobs, a 3.6% increase compared to February 2020. Job growth was seen across nine of 11 major industry sectors, highlighting a robust recovery in several fields.

• The unemployment rate slightly rose to 3.9% in February 2024, the highest since January 2022, despite expectations for it to remain steady. Meanwhile, average hourly earnings continued to grow, with a 4.3% increase year-over-year, indicating strong wage growth across most major industries.

U.S. Foreclosure Activity Continues to See an Annual Increase link

• In February 2024, U.S. properties with foreclosure filings reached 32,938, showing an 8% annual increase. The numbers hint at shifting housing market dynamics, potentially altering homeowner financial landscapes and market strategies.

• Foreclosure completions (REOs) have decreased annually in 28 states, with notable drops in Georgia (52%), New York (41%), and North Carolina (34%). This contrast indicates a complex, uneven foreclosure landscape across the U.S.

• Foreclosure starts rose both monthly and annually, with a 4% increase from last month and an 11% rise from the previous year. States like Florida, California, and Texas saw the highest number of foreclosure starts, underscoring a growing concern in certain regions.

Homebuyers need to earn 80% more than in 2020 to afford a house now. It's not just due to high mortgage rates link

• Homebuyers now need to earn $106,500 annually, an 80% increase from 2020, to afford the typical U.S. home. The typical household income in 2024 is $81,000, up from $66,000 in 2020, but this has not kept pace with skyrocketing housing costs.

• Housing affordability is also affected by tight supply and restrictive zoning laws. New housing construction is hampered by regulations, keeping the market supply low and prices high in many areas.

• Local policy changes, such as easing land-use and zoning regulations, could significantly improve housing affordability. Some regions have seen a rise in new housing inventory after relaxing zoning rules, demonstrating a potential path toward more accessible housing markets.

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Coastal land is sinking, doubling the potential damage of rising seas link

• Coastal lands are sinking at rates up to five millimeters per year, exacerbating the threats of sea-level rise. This phenomenon, coupled with the sea rising by about three millimeters annually, significantly increases the risk of flooding in coastal areas.

• Over 2 million people and 800,000 properties, including critical infrastructure like New York’s JFK and LaGuardia airports, are directly impacted by the sinking land. The combined effect of land subsidence and sea-level rise doubles the frequency of flooding, halving the preparation time for affected communities.

• The primary causes of land sinking include climate-induced droughts leading to increased groundwater pumping and dam construction. These actions not only accelerate land subsidence but also create sediment-starved coastal areas, further contributing to the problem. Solutions such as water recycling, usage restrictions, and rain banking are crucial to mitigate this issue within the next decade to avoid severe impacts on infrastructure and the economy.

Every Submarket in Phoenix is Logging Rent Cuts link

• Phoenix experienced significant apartment demand in 2023, with an impressive absorption of 12,000 units, marking the largest tally since 2000, aside from the COVID-19 boom in 2021. However, this demand was outpaced by a supply of 17,000 units, leading to rent cuts across all submarkets.

• The city's occupancy rate fell to 92.6% in January, the lowest since January 2014, demonstrating the impact of the oversupply on the market. Despite high demand, the surplus in supply led to decreased occupancy rates.

• Rent cuts were recorded in all Phoenix submarkets in February, including areas with little to no recent supply, such as South Glendale, Northwest Phoenix, and West Phoenix. This trend highlights the broad impact of the supply-demand imbalance, affecting rent prices across the region.

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That's all, folks.

Cheers,

Vidit

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