Visualizing America’s Shortage of Affordable Homes

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Economic Watch: Jobs Boom Continues in March; Rate Cuts Remain Likely link

• The U.S. job market outperformed expectations in March, adding 303,000 jobs against the anticipated 200,000. This surge highlights the strength of the labor market, with notable gains in healthcare, government, leisure & hospitality, and construction sectors.

• Unemployment rate dips to 3.8% with a slight increase in the labor force participation rate to 62.7%. Year-over-year, average hourly earnings rose by 4.1%, aligning with market predictions and underscoring sustained economic growth.

• Despite robust job growth, the Federal Reserve remains cautious about interest rate cuts. However, a midyear start to rate reductions is anticipated, which could boost commercial real estate investment and maintain healthy leasing activity despite some economic uncertainties.

Visualizing America’s Shortage of Affordable Homes

Top 10 U.S. Counties with Highest Effective Property Tax Rates in 2023 link

• Single-family home property taxes surged by 6.9% in 2023, reaching $363.3 billion. This marked the largest increase in the last five years, nearly double the growth rate of 2022.

• The average property tax on U.S. single-family homes rose by 4.1% in 2023, with an effective tax rate of 0.87%. This is the first increase since 2017, signaling a notable shift in property tax trends.

• The highest effective property tax rates in 2023 were found in the Northeast and Midwest, particularly in Illinois, New Jersey, and Connecticut. Conversely, the South and West, including Hawaii and Arizona, boasted the lowest rates, highlighting significant regional disparities in property taxation.

A Google Search Trend: “AI Real Estate”

The integration of Artificial Intelligence (AI) is revolutionizing the real estate industry by improving investment, decision-making, and customer service processes. AI's role spans from providing analytics that guide investment decisions to automating tasks that enhance the customer experience for a range of professionals, including appraisers and developers. Key AI innovations include automated valuation models, virtual tours, and personalized marketing strategies, enabling real estate agents to offer customized services to their clients.

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2024 Forecast Strengthens Based on Economic Indicators link

• Rental Market Growth: The forecast for 2024 shows a strengthened economic outlook, with 12% of the largest 50 apartment markets expected to see rent increases of 3% or higher. Most markets will experience growth between 2% and 2.9%, indicating a broadly positive trend across the nation.

• Job Market Resilience: Following the addition of over 637,000 jobs in Q4 2023, the U.S. economy added more than 500,000 jobs in the early months of 2024, demonstrating the labor market's continued strength. Cities like Houston and Austin are leading in job creation, prompting upward revisions in employment forecasts for several key markets.

• Interest Rate Adjustments: Despite ongoing higher-than-target inflation, there's anticipation that the Federal Reserve may begin to lower interest rates in the second half of the year. The job market's positive surprises could influence the timing and extent of these rate cuts.

• Economic Projections: After a 3.2% GDP growth in Q4 2023, projections for 2025 suggest a slight slowdown, with GDP expected to fall between 2.4% and 2.7%. However, consumer spending remains robust, expected to drive significant GDP growth along with a forecasted 2% rise in retail sales this year.

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Visualized: How $100 invested in 1970 would grow if invested in different asset classes

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That's all, folks.

Cheers,

Vidit

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