WEEKLY
Mortgage Rate (30-Year Fixed): 5.51% (as of 7/15)
MONTHLY
Existing Home Sales: -3.4% (May 2022)
New Residential Sales: +10.7% (May 2022)
Median Sales Price for New Houses Sold: $449,000 (May 2022)
Construction Spending: +0.2% MoM (April 2022)
New Residential Housing Starts: 1.49 million (May 2022)
New Residential Housing Completion: 1.47 million (May 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. New York leads U.S. multifamily record-breaking year
New York has topped the country’s major metros in terms of multifamily net absorption in the last two decades, with 17,200 units or a 15% share of the total absorption of the top 15 areas monitored by CBRE. The group announced that the growth is attributed to strong demand for jobs and rise in wages. Investment sales, on the other hand, reached almost $18 billion in 2021, more than double the amount of the previous year. CBRE’s New York Tri-State Debt and Structured Finance opined that New York continues to be a desirable location because of high-paying jobs and prestigious universities.
9. Adaptive reuse of commercial buildings into multifamily properties growing
The NAIOP, the Commercial Real Estate Development Association, announced that adaptive reuse of commercial buildings continues to rise due to the economic benefits for developers through higher returns, more affordable materials costs and being more environmentally-friendly compared to demolitions. The NAIOP report concludes that overall cost and time reductions in the 15% to 20% range or higher are often cited for adaptive reuse. When compared to construction of new buildings, adaptive reuse projects use fewer new materials and thus incur lower costs than labor-related expenses.
8. Apartment net operating incomes up 20% YoY
Property-level net operating incomes (NOIs) pushed the Freddie Mac Investment Index higher with a record-setting 19.8% YoY in 1Q22. This is the fastest recorded growth since Q315, which recorded a 6.6% YoY increase. Three Florida metros topped the list for the last 12 months. Orlando recorded NOI growth at 33.1%, followed by Tampa (31.4%) and Miami (30.9%).
7. Average multifamily rent in June hits $1,700 for first time
Multifamily rents continue rising at 13.7% YoY in June, according to the Yardi Matrix June 2022 Multifamily Report. However, this is down 50 basis points (bps) from the previous month, and 130 bps from the peak 15.2% recorded in February. Meanwhile, monthly asking rents have already reached a record average of $1,706. The press release also stated that there may be some signs of slow down in June but the value still remains high.
6. Single women fuel multifamily property growth prospects
The decelerating percentage of marriage in the past four decades has contributed to the growth in demand for multifamily properties, according to a report by CoStar. The group emphasized that women have become a large part of the source for apartment demand, driven by the increasingly high number of unmarried women over the age of 28. Interestingly, a previous report from the National Association of Realtors revealed that single women who have achieved financial stability were also willing to make sacrifices for homeownership.
5. Apartment renters’ preferences have changed due to the pandemic
A report from CityStreet Residential Partners reveals that apartment renters’ preferences on amenities have evolved due to their experiences during the pandemic. Residents now prefer more stable and secured Wi-Fi networks to complement their work-from-home setup, on-site fitness centers, pools, elevators and smart HVAC systems. Interestingly, many survey respondents indicated that parking spaces with electric car chargers to accommodate their electric or hybrid vehicles were important to them.
4. Luxury, Class A multifamily developments in Las Vegas rise
A recent CBRE report reveals that Las Vegas is now dominated by luxury Class-A developments, especially in the Southwest and Henderson submarkets. Almost 63% of the developments currently in the pipeline cater to high-end buyers. Likewise, developers are also building in the Northwest and North Las Vegas submarkets where rent growth has been surging for the past months. Class A apartments in Las Vegas registered a 23.6% rent growth YoY as of the 1Q22, while maintaining an average occupancy of 96.9% in 2021. CBRE forecasts 8,000 more completions before the year ends.
3. D.C. rents in metro area growing fast
Data from Delta Associates reveals that D.C. metro area rents rose 15.7% in 1Q22 on a YoY basis. Class A apartments averaged $3.03 per square foot per month in 2012 but have already gone as high as $3.49 in 1Q22. The group estimates that an 800-sq-ft apartment is already renting for $2,792.
2. Average rent in Manhattan hit $5,000 in June
The average monthly rent for a Manhattan apartment has breached the $5,000 mark for the first time, with no signs of stopping, according to brokers and analysts. According to real estate appraisal firm Miller Samuel, average apartment rent in June was at $5,058, rising 29% YoY while median rent rising 25%. The group also attributes the rise to increased demand for renting brought about by higher mortgage rates and concerns about a potential housing downturn. The vacancy rate for Manhattan apartments at the end of June was recorded at a low 1.9%.
1. Are millennials to be blamed for soaring inflation?
The soaring inflation, which was described as “unacceptably high” by Treasury Secretary Janet Yellen is driven by millennials, according to Smead Capital Management CIO, Bill Smead. He explained in an interview with CNBC that a portion of the population aged 27 to 42 who “postponed homebuying [and] car buying, for about seven years later than most generations” is to be blamed for the rapid rise in prices hammering the economy. Smead likened this to the inflation in the 1970s when 75 million baby boomers started entering the market. He concludes that even if the Fed takes measures, this won’t guarantee a reduction in the number of millennials driving the growth of demand.
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