WEEKLY
Mortgage Rate (30-Year Fixed): 6.79% (as of 9/29)
MONTHLY
Existing Home Sales: -0.4% (August 2022)
New Residential Sales: +28.8% (August 2022)
Median Sales Price for New Houses Sold: $436,800 (August 2022)
Construction Spending: –0.7% MoM (August 2022)
New Residential Housing Starts: 1.52 million (August 2022)
New Residential Housing Completion: 1.34 million (August 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.
Rents in Boston have risen 9.7% YoY, according to Dwellsy. With a median rent of $3,000, this makes Beantown one of the most expensive cities for renters across the country. The group attributes the soaring rent to low supply that can’t keep up with surging demand. According to Daryl Faireweather, chief economist at Redfin, landlords tend to keep raising rents given the high demand, drawing more profit from each transaction.
9. US apartment construction set to reach record level in 50 years
Multifamily development is expected to reach a 50-year high this year, according to data from RentCafe. By December, a total of 420,000 new rental properties will be delivered, which surpasses the 1972 record of 400,000. The most number of completions by the end of the year will be in New York with 28,153 units, up by 50% from last year. Other cities that made the top metros for apartment construction include Dallas, Miami, Austin, Houston and Phoenix.
8. Fannie Mae will help renters boost their scores
Fannie Mae is set to launch a program that will allow landlords to report to credit bureaus such as Equifax, TransUnion, and Experian the on-time rent payments of tenants to help renters increase their credit scores. The program specifies that only positive payments will be reported while those who will fall behind will be unenrolled. Renters likewise can choose to opt out at any time. According to the Urban Institute, renters are seven times more likely to lack a credit score compared to homeowners.
7. NMHC: Flexible local zoning and land use regulations needed
The National Multifamily Housing Council (NMCH) and the National Apartment Association (NAA) forecast 3.7 million apartment units are needed in the U.S. by 2035 to meet the growing demand. The groups opine that local governments keep multifamily builders from building more housing because of existing regulations. Therefore, they recommend more flexible local zoning and land use regulations to raise the supply of apartments. They added that more apartments would bring millennials closer to cities that have lost population due to Sun Belt migrations.
6. Multifamily projects lead Manhattan’s largest property loans in August
A total of $1.5 billion in loans was recorded in Manhattan, to be used to finance large multifamily projects. These include Upper East Side projects by Neat Chetrit’s $365 million loan for an 850-unit luxury building complex, and Square Mile Capital’s $286 million borrowing to finance a 455-unit tower construction. Toll Brothers, on the other hand, secured $98 million for an 81-unit condominium project in the same location.
5. Most affordable cities for multifamily investing revealed
Online commercial real estate marketplace company Crexi determined the seven most affordable cities for multifamily investing. The list includes Albuquerque, NM; Tacoma, WA; Birmingham, AL; Oklahoma City, OK; Hartford, CT; Buffalo, NY and Providence, RI. The average effective asking rent is lowest in Oklahoma City at $883 a month with rent growth at 8% YoY. Vacancy rate remains low at 2.5%.
4. Wharton: Banks drawn more to real estate lending
Research from Wharton finance professor Itay Goldstein and two other colleagues concludes that banks are into real estate lending because of its profitability during housing market booms. Although they increase their mortgages, they likewise decrease lending to other commercial assets. Goldstein recommends that policymakers balance their focus on different sectors during appreciation in the real estate market.
3. Brooklyn multifamily market remains healthy
Investment sales in Brooklyn multifamily buildings reached $2.7 billion of the transactions in 1H22, according to Ariel Property Advisors’ Brooklyn 2022 Mid-Year Commercial Real Estate Trends report. Multifamily projects in development sites accounted for another $773 million of the total sales. The report also adds that eight of the top 12 transactions over $50 million in the 1H22 were either for multifamily construction or development sites where multifamily projects are planned.
2. Multifamily investment market is robust, according to Berkadia VP
In an interview, Berkadia executive VP and head of production Ernie Katai said that the US multifamily investment landscape remains robust since housing demand is still high and capital is available despite the interest rate hike. In particular, Katai believes that multifamily is one of the lowest risk asset classes in commercial real estate (CRE) and there’s still a good number of deals in the pipeline. He adds that multifamily properties will still continue to be a favorite among lenders in the coming year.
1. Sacramento apartment supply is up, but still falls short of demand
Sacramento is experiencing a surge in apartment construction but the rising demand can’t keep up with it. The California Apartment Association recorded a growth in new builds but the city still needs 10,000 units each year to meet the existing demand. From 2015 to 2021, the average number of completed constructions was only 1,670 units a year.
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