WEEKLY
Mortgage Rate (30-Year Fixed): 5.55% (as of 8/25)
MONTHLY
Existing Home Sales: -5.9% (July 2022)
New Residential Sales: -12.6% (July 2022)
Median Sales Price for New Houses Sold: $ (July 2022)
Construction Spending: -1.1% MoM (June 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. Atlanta multifamily market continues strong performance in 2Q22
Multifamily vacancies in Atlanta dropped to 4.5%, falling 10 basis points in 2Q22 YoY, according to Northmarq. The decline is more evident in Class A properties, which fell to 4.8%. This is the first time that the rate has gone below 5% in the past five years. The group expects the vacancy rate to go up by 4.7% before the year ends. On the other hand, multifamily sales rose 8% in the same period, with the median price in the 1H22 hitting $202,500 per unit, which was almost 20% higher than the median price set in 2021.
9. Multifamily borrowing rose in 2Q22
Mortgage originations for commercial and multifamily properties increased slightly in 2Q22 to 19% YoY, according to the Mortgage Bankers Association. The group noticed that despite the slower pace of increase compared to 1Q22, the current rate is already a quarterly record. Multifamily originations, in particular, rose 24%. Retail topped the list of sectors with the highest rate of originations at 108% YoY growth.
8. Round Rock, TX tops list of best cities for renters
Real estate leasing platform RentCafé revealed that the best places for renters are small-sized cities in the South and Southeast regions. In its ranking, Round Rock, TX topped the list because of its low population, highly rated academic institutions, high availability of apartments and improved job growth rates. Other small cities that made the list include Raleigh, NC and Conroe, TX. For the large cities category, Jacksonville, FL ranked first because of its low cost of living and housing opportunities. It was followed by Charlotte, NC and Austin, TX.
7. Northmarq: Midwest multifamily market a better option for placing capital
Northmarq’s recent Midwest Multifamily Outlook report pointed out that the region is poised for better growth, with the Kansas City, Des Moines and Omaha triangle being a huge prospect for investors. According to The McKinley Companies CEO, Albert Berriz, “Today, we see major funds that I never would have imagined would be in the same locations where we’re trying to buy.” The Mountain Region has also gained from migration, particularly in areas such as Phoenix, Las Vegas, Salt Lake City and Denver, thanks to these cities’ strong jobs market and lower cost of living.
6. U.S. apartment completions set to reach 420,000 this year
Leasing platform RentCafé announced that new apartment completions this year will reach 420,000 before the year ends, breaking the 400,000 mark since 1972 where 464,000 rental properties were delivered. The report also emphasizes that half of the 20 metros included in the study, including Seattle and Portland, are on track to hit record highs in apartment completions in 2022 compared with their total deliveries in each of the past five years. However, metros are still struggling to meet the very high demand for rental housing.
5. Orange County multifamily market made gains in 2Q22
The median sales price of Orange County multifamily properties in 2Q22 hit $416,700 per unit, with cap rates holding at 4% average, according to Northmarq. The vacancy rate further dropped to 3.1%, which is the lowest level since mid-2015, with the Brea and Buena Park submarkets having the most pronounced drop during the quarter. The group forecasts the vacancy rate to hit 3.2% before the end of the year. Apartment rents, on the other hand, surged during the same period with asking rents hitting 5.6% to $2,466 per month. In particular, the average Class A asking rent was recorded at $2,950 per month, which was 24% higher YoY.
4. Phoenix on track to break its five-year apartment construction record
Data from RentCafé revealed that Phoenix is likely to raise its apartment supply before the year ends, with apartment deliveries hitting almost 16,000 units, which is higher than Washington, Atlanta and Seattle. At the mid-year point of 2022, the Phoenix metro had already delivered 2,240 new rentals, which is more than what was recorded in Los Angeles and Queens, New York.
3. Multifamily market expected to withstand future economic uncertainties
According to a research report by Arbor Realty Trust and Chandan Economics, renting has become a preferred option even in economic uncertainty where high inflation continues to impact the spending power of households, and the rise in interest rates by the Fed continues to tame the rise in prices. Renters are also taking the opportunity to work outside of large metros where remote work allows them to find areas with lower costs of living and better telecommuting experience. The strong performance of the market will continue to be fueled by households delaying their plans for home ownership, or renters seeking multifamily units with the best amenities available.
2. Apartment market had a phenomenal 12-month period, according to REIT manager
In an interview by Mortgage Professional America (MPA), Al Otero, portfolio manager at Armada ETF Advisors, commented that the apartment market had a “phenomenal 12-month period” since the summer of 2021, thanks to the market being able to perform extremely well in any economic situation. The recession-proof nature of the industry has positioned landlords into a more advantageous position with higher occupancy rates, better retention levels and the opportunity to pass on the impact of inflation to renters through higher rents. Otero also added that the coastal and Sunbelt markets were the most profitable for REIT companies.
1. CBRE: U.S. multifamily market still holds its strong position
CBRE announced that the U.S. will most likely sustain a healthy apartment market performance through the end of the year. During the webinar hosted by the real estate company, the panelists declared that apartment demand will hold steady despite the recent drop in consumer confidence. The growth in multifamily supply from the delivery of existing properties in the current pipeline will push vacancy rates to normal levels and impact rent growth to drop, according to Matthew Vance, head of U.S. multifamily research. He also noted the rise in workers moving back to urban and downtown areas after the high cost of living influenced renters to migrate to the suburbs.
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