WEEKLY
Mortgage Rate (30-Year Fixed): 5.10% (as of 4/28)
MONTHLY
Existing Home Sales: -2.7% (March 2022)
New Residential Sales: -8.6% (March 2022)
Median Sales Price for New Houses Sold: $436,700 (March 2022)
Construction Spending: +0.5% MoM (March 2022)
New Residential Housing Starts: 1.79 million (March 2022)
New Residential Housing Completion: 1.3 million (March 2022)
QUARTERLY
Homeownership Rate: +65.4% (1Q22)
Rental Vacancy Rate: +5.8% (1Q22)
Sources: NAR, BLS, Federal Reserve Bank, MBA
Note: Rates listed are estimates and may not reflect actual rates depending on term, sponsor location, and other factors involved.
10. Multifamily mortgage debt outstanding sets record in Q421
The Mortgage Bankers Association’s (MBA) latest Commercial/Multifamily Mortgage Debt Outstanding quarterly report announced a 2.4% YoY increase in total multifamily mortgage debt, growing by $42.1 billion in 4Q21. According to the MBA, this indicates a stronger 2022 multifamily lending landscape as the Q421 pace indicates evidence of solid lending activity continuing within this year. Multifamily mortgages, agency and government-sponsored enterprise (GSE) portfolios, and mortgage-backed securities have the largest share of total debt outstanding at $901 billion or 50% of the total debt.
9. Austin multifamily market accelerates deliveries
Despite the global supply chain crisis for construction materials, the Austin multifamily market delivered 1,075 units in January 2022 with 37,813 units more under construction. According to the March 2022 Yardi Matrix report, multifamily sales in the area recorded a record-high $4.3 billion in 2021. Rent growth was also up 0.6% through January at $1,694, as well as the occupancy rate reaching 95.8%. In another report by Northmarq, the rate of Austin apartment sales accelerated on a QoQ basis with apartment prices close to $208,000 per unit in transactions.
8. Los Angeles apartment market demand continues to rise
The greater Los Angeles area continues to experience a tight apartment market as more demand from young professionals drive apartment rental housing. Apartment vacancy rate is currently at 3.4%, lower than the pre-pandemic value of 4.4% at the start of 2020. The increase in demand has led to a rise in asking rents across Los Angeles County by 7.7%. According to real estate firm Stepp Commercial, the market is poised to remain strong in the coming months with 9,600 new apartment units delivered in the last 12 months and more than 28,000 still awaiting delivery.
7. MIT: Multifamily properties still highly favored by real estate investors
The Massachusetts Institute of Technology (MIT) Sloan School of Management recently held the MIT Sloan Investment Conference with expert panelists to identify best real estate opportunities today. Michael Haggerty of TA Realty stated that the multifamily property market continues to be a hot area of real estate since single-family homes have forced buyers to shift to apartment complexes instead. His firm currently has 95% of multifamily bookings compared to only 65% during pre-pandemic. James Chung of Bridge Investment Group added that more unused office spaces are now being converted to multifamily properties as developers and investors are taking advantage of the surge in apartment demand.
6. Home prices surged almost 20% in February
The S&P CoreLogic Case-Shiller national home price index reports a 19.8% YoY in home prices, which marks the third-highest record in the history of the index. Sun Belt cities such as Phoenix, Tampa, Florida and Miami posted the highest gains while Washington, D.C., New York and Minneapolis had the smallest. The index’s 10-city composite annual increase registered 18.6%, higher by 1.3 basis points MoM. The 20-city composite, on the other hand, rose to 20.2%, up by 1.3 basis points MoM.
5. Multifamily housing design is going more green
A report from the National Association of Home Builders (NAHB) revealed that 36% of multifamily developers are building green projects and this number is projected to rise to 47% by the end of 2022. From this group of multifamily developers, 80% identify their firms as green home builders. In a separate report, property firm Lendlease announced that the early stages of multifamily housing design is critical, especially when planning against climate and environmental risks. RKTB Architects, on the other hand, has noted the growth in sustainable alternative lighting options, while CGI+ Real Estate Investments cited converting wastewater into energy as an important innovation in reusing elements in a multifamily property building.
4. Multifamily market now tighter due to higher apartment demand
Apartment markets continue to tighten, according to the National Multifamily Housing Council’s (NMHC) April 2022 Quarterly Survey of Apartment Market Conditions. The NMHC states that apartment demand continues to outpace the available supply as more builders have to contend with increasing material costs and shortage of labor. The Market Tightness Index was recorded at 60 in Q12, which is above the breakeven level of 50. This indicates that market conditions have become tighter, according to the group.
3. Multifamily constructions fuel growth in land sales market
Land sales volume and price appreciation have recorded high growth in 2021 due to the rise in single-family, industrial and multifamily construction. According to the National Association of Realtors (NAR), five states have a combined total of 41% of land sales in 2021. These are Texas (15%), Florida (13%), California (6%), Georgia (5%) and Arizona (5%). In addition, the past year has been strong for land sales, according to JLL Capital Markets. The group also pointed out that the rise in multifamily property building has contributed to the surge in land sales across the country. The trend will likely continue through the first half of this year as higher apartment demand is projected, according to real estate firm Cushman & Wakefield.
2. Miami tops rent growth YoY in March
Average asking rents for multifamily properties reached a new all-time high in March, averaging $1,642 a month, up by 14.8%, according to the Yardi Matrix’s rent growth index. The Miami metro area recorded 26.3% YoY rent growth in March 2022 with 5.4% of total apartment stock completions in the same month. The index also included Orlando, Florida (24.8%), Tampa, Florida (23.8%), Las Vegas (23.4%) and Phoenix (23.2%) in the top five.
1. Global investors rank U.S. multifamily acquisitions as top investment opportunity
Multifamily acquisitions remain the most popular investment in U.S. cities over the next three to five years for global real estate investors, according to the Association of Foreign Investors in Real Estate’s (AFIRE) 2022 International Investor Survey Report. Among the survey respondents, 71% indicated they planned to increase investment in secondary U.S. metros over the next three to five years, while 63% plan to do the same in tertiary cities. Atlanta topped the list of the most preferred cities for future real estate investment at 37%, followed by Austin and Boston.
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