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Confidence in the multifamily sector took a blow during the first quarter, the National Association of Home Builders reported May 19 in its Multifamily Production Index. The MPI dropped to 48; the MPI measures builder and developer sentiment about current multifamily conditions, and a number below 50 indicates worsening conditions.
The sales of existing homes fell 2.4% between March and April, and are down 5.9% year-over-year as demand for homes dropped and the inventory of unsold homes climbed, the National Association of Realtors reported May 19.
Mortgage rates fell slightly during the past week amid economic uncertainty, waning purchase demand and declining homebuilder sentiment, Freddie Mac reported May 19 in its Primary Mortgage Market Survey. Builders are also facing rising building materials costs, so sentiment likely will remain low.
Physical office usage hit 40.5% nationally last month, the highest since the onset of the COVID-19 pandemic, according to data from Kastle Systems, GlobeSt.com reported May 16. However, office vacancy reached 18.1% during the first quarter and the rate is still rising, especially in expensive cities like New York and San Francisco where tenants are more financially motivated to shed space.
The ongoing rise in inflation and interest rates is putting the single-family housing market at the most significant risk for a correction, according to CBRE’s global chief economist, GlobeSt.com reported May 19. However, commercial real estate market fundamentals should be OK in the near-term.
The ongoing shortage of for-sale homes is showing signs of easing; inventory in April was down 9% year-over-year but it was the smallest drop since March 2020, Redfin reported May 20. Home sales slid 8% in April, the biggest drop since June 2020, allowing price growth to slightly normalize.
An analysis of the wildfires tracked by the National Oceanic and Atmospheric Administration showed that 66% of the damages incurred since 1980 have happened during the past five years, CNBC reported May 16. Insured damages in 2021 totaled $5 billion, and last year was the seventh consecutive year where insured damages topped $2 billion.
Multifamily demand and rent growth remain exceptionally strong, Yardi Matrix reported May 10 in its latest Multifamily report. Average U.S. asking rents rose $15 in April to an all-time high of $1,659, and year-over-year growth remained high at 14.3%. Markets in Florida and the Southwest maintained the top spots in year-over-year rankings. Boston, New York, San Jose, California, and Philadelphia also ranked as top performers.
Paula K. Konikoff, JD, MAI, AI-GRS, was nominated for 2023 Appraisal Institute vice president by the AI National Nominating Committee at its May 11 meeting in Chicago.
Consumer sentiment toward housing fell to its lowest point since May 2020, with 76% of consumers saying now is a bad time to buy a home, an all-time high, Fannie Mae reported May 9 in its Home Purchase Sentiment Index. Rising mortgage rates contributed to the declining sentiment, with 73% of respondents expecting rates to continue rising over the next 12 months.
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