U.S. Housing Market Is Short 7.2 Million Single-Family Homes

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“I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

― Maya Angelou

U.S. Housing Market Is Short 7.2 Million Single-Family Homes link

• The U.S. housing market is experiencing a significant shortage, with a deficit of 7.2 million homes as demand outpaces supply. Over the past decade, 17.2 million households were formed, but only 10 million single-family homes were built.

• Builders may need until 2029 to close the housing gap unless production increases by at least 50%. In 2023 alone, 1.7 million new households were formed, exacerbating the shortage and widening the inventory gap from 6.5 million in 2022 to 7.2 million.

• Affordably priced new homes are in high demand, with 43% selling for less than $400,000. Millennials, making up 48% of new-home buyers, are driving this trend with a preference for new homes, providing more options for home shoppers willing to consider these properties.

Multifamily Starts Predicted to Drop 20% This Year link

• The National Association of Home Builders (NAHB) forecasts a 20% decline in multifamily starts this year, aiming to curb inflation. This follows a 14% decrease in 2023, with 472,000 units started.

• The expected drop to 379,000 units in 2024 signifies a cooling period for the multifamily development sector. This adjustment comes after a notably high year of activity.

• The reduction in multifamily starts is part of a broader effort to stabilize the housing market and address inflation concerns. This strategic move reflects shifting economic strategies and market anticipation.

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CRE CLO Distress Rates Surge Over 440% in 12 Months link

• The overall distress rate for CRE CLOs skyrocketed from 1.4% to 7.4% in 2023, peaking at 8.6% in January 2024. This significant increase indicates a growing concern in the commercial real estate finance sector.

• Outstanding CRE CLO loans are valued at approximately $80 billion. These loans, primarily floating-rate with three-year terms, are facing increased risks due to maturity issues exacerbated by rising interest rates.

• Over the past year, the amount of distressed CRE CLOs jumped from $1.3 billion to more than $6.8 billion. This over 440% increase in distress levels showcases the volatility and the emerging challenges within the commercial real estate market.

The industry hiring the most in every country

The U.S. is the World’s Top Oil Producer  link

• Over the last decade, the United States has become the world's largest producer of crude oil, overtaking giants like Saudi Arabia and Russia. This significant achievement is highlighted by data from the U.S. Energy Information Administration.

• The rise in U.S. oil production is largely due to advances in hydraulic fracturing, or "fracking," across shale formations from Texas to North Dakota. This method has revolutionized oil extraction, contributing to the U.S. claiming the top spot in 2018.

• The U.S.'s position as the leading oil producer marks a pivotal shift in global energy dynamics. It not only underscores the country's energy independence but also its influential role in the global oil market.

Indiana's housing market is primed to bounce back in 2024 link

• Sales in Indiana dropped by 14% from 2022 to 2023, but optimism is high for a recovery in 2024. Inventory was up year over year, but new listings hit a 25-year low.

• The Altos Market Action Index shows Indiana's housing market improving, with February 2024 figures indicating a seller's market. Mortgage rates stabilizing and slight decreases have encouraged both buyers and sellers to return.

• Housing inventory struggles continue, with new construction taking on a more significant role due to existing inventory challenges. Despite slower market conditions in 2023, the median list price in Indiana rose, suggesting a potential for growth in sales by 7% to 10% in 2024.

The New Tiny Home Capital link

• Samara, co-founded by an Airbnb cofounder, is revolutionizing the accessory dwelling unit (ADU) industry by moving its manufacturing operations in-house. This strategic move to a factory in Mexicali, Mexico, aims to streamline production, enhance quality control, and meet the surging demand for ADUs in California.

• The startup's initiative is a response to California's evolving ADU regulations, which have been relaxed to address the state's acute housing shortage. Between 2016 and 2022, the number of ADU permit requests soared nearly 19-fold, showcasing the growing popularity and potential impact of these housing solutions on the housing crisis.

• Samara's product lineup, including one-bedroom, two-bedroom, and studio models, emphasizes longevity and efficiency in homeownership. The company's 150,000-square-foot Mexicali factory enables end-to-end construction of prefabricated homes, promising quicker delivery times and a seamless customer experience from design to build.

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The Best Markets for First-Time Home Buyers: NY Times

Britain to lead 2024 European real estate boom as international buyers eye opportunities, research says

Multifamily's Bounce Back Will Be Sharpest in These Markets 

That's all, folks.

Cheers,

Vidit

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