WEEKLY
Mortgage Rate (30-Year Fixed): 5.09% (as of 6/2)
MONTHLY
Existing Home Sales: -2.4% (April 2022)
New Residential Sales: -16.6% (April 2022)
Median Sales Price for New Houses Sold: $450,600 (April 2022)
Construction Spending: +0.2% MoM (April 2022)
New Residential Housing Starts: 1.72 million (April 2022)
New Residential Housing Completion: 1.3 million (April 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.
The New York Times, Los Angeles Daily News and Philadelphia Inquirer all report a heated renter bidding war in the country’s largest metros, as fast-rising rents continue to drive potential tenants willing to overbid to secure their spot. According to the Harvard Joint Center for Housing Studies, higher-income tenants are dominating the apartment rental market, driven partly by rising cost of for-sale homes. Redfin reports that rents have shot up 17% YoY in March.
9. Multifamily modular construction market to growth by 2027
Stronger returns are expected for the multifamily modular construction market in the next five years, according to HTF Market Intelligence’s industry report released this week. In particular, apartment type and residential type construction showed modest gains in 2021 and are expected to sustain the many growth opportunities ahead. From 2014 to 2019, multifamily modular construction developers showed decent sales figures, with net income doubling in the five-year period as well as operating and gross margins constantly expanding.
8. Millennials are more open to multifamily housing options
In a report on the status of millennial homebuyers, millennials now account for the largest demographic of homebuyers in the U.S. Speaking to GOBankingRates, Phil DeGisi, chief product and marketing officer of real estate firm Orchard, also added that millennials understand that their first home is not their dream home. This makes the demographic more open to multifamily housing options, like condos and quadruplexes as their first home. DeGiSi also added that millennials are migrating towards South and West regions to take advantage of prices, the warm weather and access to outdoor activities.
7. Miami’s multifamily market rebounds to record high
2021 set record-high values for the South Florida multifamily market as it registered 603 multifamily sales totaling $11.4 billion. This is more than double the annual record of $5.5 billion recorded in 2016, according to Cushman & Wakefield. Miami-Dade County recorded 35% of total sales volume. Low vacancy in the region has been recorded in 2021 but rental supply this year is expected to reach more than 17,000 units.
6. Residential construction jobs jump 7.6%
Construction employment was registered at 36,000, up by 7.6% MoM. This is the highest count in the last three months as the labor market nearly reaches its pre-pandemic levels while the unemployment rate remains historically low. According to a new report from the Home Builders Institute (HBI), the total number of construction workers needed to meet the demand within the sector is 740,000 annually. The group added that the lack of skilled construction manpower is a major issue for the nation’s home builders. The National Association of Home Builders (NAHB) reiterates that demand for construction workers remains strong as net residential construction jobs added 103,000 workers in the last 12 months.
5. National average rent rose in May
National average rent rose in May at 16.4% YoY and 1.2%, according to Apartment List. The group also announced that it has observed rent growth for this year is following a trend more similar to those of the pre-pandemic years than those of the last two years. Among the metros with the largest annual rent percentage increases, Miami tops the list with 27.7% increase at $2,040 average rent, followed by Orlando (26.4%), Tampa (24.4%) and Nashville (20.9%). National average vacancy rate was also observed to have increased since October when it reached 5.0%.
4. Multifamily property prices inch even higher
Commercial real estate data provider CoStar reported that multifamily property prices rose in April after slight declines in February and March. The Commercial Repeat Sales Index also added that the value-weighted index of multifamily property prices increased 21.8% YoY with the index rising 1.4% MoM.
3. More international investors move towards U.S. multifamily construction
According to Deloitte, international multifamily investments increased to 30% in 2021, up from 24% in 2019 as the investment climate is gradually returning back to pre-pandemic levels. The group’s U.S. commercial real estate property sector report revealed that global investors are also shifting their preferences to emerging US cities such as those in the Southeast and Southwest where ROI is likely to be higher. Multifamily development has now outperformed industrial growth and remains a top choice among such category of investors.
2. Apartment construction hit biggest construction volume
Construction activity in the U.S. apartment market registered 760,000 units in 1Q22, according to data from RealPage Market Analytics. The record-setting construction volume was lifted by stock in the Sunbelt areas as developers scramble to meet in-migration demand. Phoenix tops the list with 36,168 units under construction, followed by Austin (33,273), New York (33,720), Dallas (32,143) and Washington, D.C. (31,108).
1. Study: multifamily industry maintains many of its strong fundamentals
About $290 billion in multifamily transactions were logged in 2021, more than double from the previous year, according to Walker & Dunlop’s new multifamily outlook report. In addition, cap rates have also reached record lows, with per unit pricing rising 11% over the past 12 months to $239,000. The report also adds that despite the ongoing inflation, interest rate hikes, and conflict between Ukraine and Russia, the multifamily industry holds on to its very strong fundamentals and is projected to be the top-performing commercial real estate asset class by the company.
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