WEEKLY
Mortgage Rate (30-Year Fixed): 5.89% (as of 9/8)
MONTHLY
Existing Home Sales: -5.9% (July 2022)
New Residential Sales: +12.6% (July 2022)
Median Sales Price for New Houses Sold: $439,400 (July 2022)
Construction Spending: 0.4% MoM (July 2022)
New Residential Housing Starts: 1.45 million (July 2022)
New Residential Housing Completion: 1.42 million (July 2022)
QUARTERLY
Homeownership Rate: +65.4% (2Q22)
Rental Vacancy Rate: +4.5% (2Q22)
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. Phoenix tops cities with highest multifamily investment volume
Yardi Matrix ranked Phoenix as the top city in terms of multifamily investment volume with $7.4 billion in 1H22, rising from $5.1 billion the previous year. A total of 127 properties with 24,787 units transferred ownership in the metro, which rose from 124 properties with 24,115 units YoY. The average price per unit rose 58.3% YoY, taking the lead among all metros in the survey. The other cities that made it to the top of the list in order of ranking are Atlanta, Dallas, Houston, New York, Orlando, Los Angeles, Miami, Washington D.C., and Denver.
9. SFH market inventory declines, making multifamily more in demand
Research from Marcus & Millichap reveals that the inventory of single family homes has continued its downward spiral for 24 consecutive months due to rising mortgage costs and higher demand from buyers. This has benefitted the multifamily market, according to the report, since potential buyers would then have to resort to renting for now given that the minimum annual income that would qualify them to purchase a median-priced home is already more than $100,000. The rise in demand has now also pushed apartment rents higher with Class A and Class B types, rising 17 YoY in June, while Class C units experienced a 12.3% rise in rental costs.
8. South Florida multifamily investments booming
Not even the interest rate hike or rising rents can stop the surge in South Florida multifamily investments. According to Cushman & Wakefield, a total of 367 multifamily assets switched hands in deals in 1H22 for a total of $4.96 billion. This is the second highest transaction so far after it set a record in 2H21. The company announced that sales activity was strong during the first six months due to factors such as high absorption of new apartment supply and low occupancy levels. New apartment deliveries in three counties reached 5,473 units with 39,216 units still in the pipeline.
7. Wharton: Housing market is not in recession yet
Wharton real estate and economics professor Fernando Ferreira is confident in his personal opinion that the country is not yet in a recession. During an interview with Wharton Business Daily, he opined that despite the property market being in a very precarious situation, it still doesn’t warrant calling the situation a recession. Ferreira also believes that the current state will persist for five to 10 years because the industry does not have ample supply to meet the surging demand for properties, which will take many years to get fixed.
6. Investment company: US multifamily properties different from Europe
Union Investment admitted in a recent interview that it invested in the US multifamily sector because the asset class remains highly ideal and is a timely diversifier to its portfolio. The company also noticed the increase in net in-migration, particularly the Sunbelt areas, where workers migrated from expensive coastal metros. When compared to the European for-rent market, the firm said that American renters, especially the younger generation, highly value amenities such as rooftop pools and state-of-the-art fitness facilities. These factors allow landlords to push rents higher, especially for the picky renters already willing to pay that higher rent.
5. Poll reveals multifamily market demand increasing
Berkadia released its 2022 Mid-Year Powerhouse Poll that reveals the multifamily market continuing to have strong investor demand even though rising rents and interest rates continue to dampen consumer confidence. Of more than 120 investment and mortgage professionals that participated in the study, 80% believe that multifamily rental demand will remain higher in 2H22. Most of the demand, according to the participants, will come from millennials in the next two years.
4. Dallas to add more residential rental units while asking rents rise 12%
Apartment rent growth rates in Dallas continues to register near record highs, although this rate of growth has started to slow down YoY. The city is expected to register the highest rent gains in Texas. The Dallas-Fort Worth metro continues to attract migrants, causing the apartment vacancy rate to reach 4% and average rents are already at $1,488 a month. As of the current period, there are over 50,000 apartments in the pipeline. Last week, developers Toll Brothers and Equity Residential announced their partnership to build three projects in Dallas, Frisco and Fort Worth, worth an estimated $1.9 billion in value.
3. Atlanta multifamily development grows higher
According to CoStar, downtown Atlanta is experiencing a growth in multifamily inventory, which has doubled compared to its 2010 levels. The group also added that rents increased 41% YoY. Currently, mixed-use developments are underway in the downtown area, particularly in lots that have been vacant or underused for many years. Developers are hoping to replicate the success in New York and Los Angeles with these projects.
2. Millennial homeownership inches closer to Baby Boomers’
According to Census data, the percentage of millennials that own a home is already at 48.6%, which is now just 30 percentage points lower than the rate for Baby Boomers. The value highlights the shifting focus of the market for millennials. Gen Z renters, on the other hand, are predicted to postpone their homeownership plans as the pandemic has forced them to stretch their finances because of the continued surge in mortgage rates this year.
1. Rent growth is highest in Sunbelt areas
Orlando has the highest recorded rent growth in the country at 16.9% YoY, according to research by Yardi Matrix. It was followed by Miami (16.7%) and Nashville (14.8%). The gateway metros also registered growth rates above 8%, supported by the rebound in employment numbers. On the other hand, rent growth was lowest in the Twin Cities (3.7%), Baltimore (6.7%) and Sacramento (7.5%). A decline in population was observed in California, New York and Illinois.
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