Metro Areas Trail Lower Density Markets for Apartment Construction Growth


In the first quarter of 2022, multifamily home building showed greater growth across all regional markets compared to the first quarter of 2021, per the NAHB’s Home Building Geography Index (HBGI). Apartment construction far outpaced single-family building in all regional geographies but especially in lower density markets1. Low rental vacancy rates and rising rents gave multifamily developers confidence to continue building despite rising costs for land, labor, and materials. Receding virus concerns have also enticed prospective renters to move closer to urban centers. Multifamily home building in heavily populated urban areas, consisting of large metro area core counties, large metro area suburban counties, and small metro area core counties, grew by 17.4%, 31.4%, and 33.7%, respectively, in the first quarter of 2022. In the same quarter of the previous year, large metro area core counties and suburban counties multifamily home building declined by 3.6% and 9.5%, respectively, and small metro areas’ core counties grew by 5.5%. Together, urban areas make up 87% of the multifamily home building market. Lower density markets’ combined market share increased from the first quarter of 2021 by 1.4 percentage points to 13.7%. Large metro area core counties lost significant market share in the first quarter of 2022, registering a 3.3 percentage point decline from the first quarter of 2021 to 36.9%, its largest year-over-year market share loss on the HBGI’s record. It was also the largest such loss among all the regional submarkets throughout the span of the HBGI. The first quarter data additionally show more activity in lower density markets. On a four-quarter moving average year-over-year basis, multifamily home building in micro counties, large metro area outlying counties, small metro area outlying counties, and non-metro, non-micro counties grew by 44%, 45%, 52%, and 83%, respectively. In the first quarter of the previous year, multifamily home building in these geographies grew by 10.1%, 6.0%, 7.7%, and -5.8%. In contrast to previous HBGI iterations, this HBGI analysis reinterprets the definition of lower density markets to include large metro outlying counties counties and exclude small metro area core counties. This allows for a better identification of trends that emerged in the Q1 2022 data. Related ‹ Housing Starts Slow in MayTags: apartment buildings, COVID-19, HBGI, home building geography index, Metropolitan Statistical Area, multifamily construction, regional differences, rental properties, rental vacancy rate, suburban

Metro Areas Trail Lower Density Markets for Apartment Construction Growth2022-06-17T09:15:36-05:00

High Rates Suppress Refinancing


By Litic Murali on June 8, 2022 • Per the Mortgage Bankers Association (MBA), through the week ending June 3, total mortgage activity decreased, with the 30-year fixed-rate mortgage (FRM) rate increasing to 5.45%, on average. The latest week’s rate increased to 5.4%, after 3 consecutive weeks of declines, each by a few basis points. The Market Composite Index, a measure of mortgage loan application volume, decreased by 6.5% on a seasonally adjusted basis from one week earlier, with purchasing decreasing by 7.1% and refinancing decreasing by 5.6%. Historically, refinancing has always been higher than purchasing activity. The recent months’ data, however, indicate that the gap between the levels of purchasing and refinancing has narrowed significantly, with May’s refinancing activity 3.4 times greater than purchasing activity. In contrast, throughout the pandemic, refinancing levels relative to purchasing levels were in the low double digits. The MBA states that high rates have suppressed refinancing and that rates and low housing inventory have negatively affected the purchasing market. Worsening affordability challenges have been particularly hard on prospective home buyers. On an unadjusted basis, the Purchasing Index showed a 21% year-over-year decline and the Refinancing Index showed a 75% year-over-year decline. Comparison of the year-over-year percent changes in refinancing and purchasing shows that from October 2021 to present, refinancing has been hit harder. The refinance share of mortgage activity increased to 32.2 percent of total applications from 31.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.2 percent of total applications. Related ‹ Large Metro Suburban Single-family Construction SlowsTags: 30-year fixed-rate mortgage, adjustable-rate mortgage, affordability, COVID-19, home mortgage, inventory, mortgage bankers association, refinancing

High Rates Suppress Refinancing2022-06-08T11:16:31-05:00

Consumer Credit Increases in First Quarter


By Litic Murali on May 9, 2022 • In the first quarter of 2022, non-real estate secured consumer credit, per the Federal Reserve’s latest G.19 Consumer Credit report, grew at a seasonal adjusted annual rate of 9.7%, with revolving debt growing at 21.4% and nonrevolving at 6.1%. Total consumer credit currently stands at $4.5 trillion, with $1.1 trillion in revolving debt and $3.4 trillion in non-revolving debt. From the previous quarter, total consumer credit increased by $107 billion, with revolving debt and non-revolving debt increasing by $56 billion and $51 billion, respectively. As the G.19 data are not inflation adjusted, it is reasonable to assume that part of the consumer credit growth, notably revolving debt, owes to recent price levels’ skyrocketing. However, even after adjusting for inflation, American households’ appetite for services increased (in part due to the lifting of COVID restrictions) and for goods was forcibly reduced. On the other hand, nonrevolving debt, which is closed-ended credit, grew moderately and was higher than pre-pandemic levels.With every quarterly G.19 report, the Federal Reserve releases a memo item covering student and motor vehicle loans’ outstanding levels on a non-seasonally adjusted basis. The most recent memo item indicates that, as of the first quarter of 2021, student loans stood at $1.8 trillion and motor vehicle loans stood at $1.3 trillion. Annualized, the changes in these two categories from the previous quarter are $58.4 billion and $83.6 billion, respectively. Together, these loans’ make up 90% of non-revolving debt (NSA), a share that has held approximately constant historically. Rising production costs resulting from ongoing supply chain issues and high interest rates have together kept car prices and, effectively, auto loan debt elevated. Related ‹ Solid Job Gains in AprilTags: auto loans, consumer credit, COVID-19, credit cards, federal reserve board, g.19, inflation, interest rates, non-revolving debt, student loan debt, supply chains

Consumer Credit Increases in First Quarter2022-05-09T13:21:39-05:00

Staying safe during the Coronavirus pandemic.


By Hillwood Communities on July 30, 2020 • As we all continue to navigate the disruptive beast that is the Coronavirus, Hillwood Communities is working diligently to continue to partner with our Realtor community to make the sales process as

Staying safe during the Coronavirus pandemic.2021-05-11T08:19:31-05:00

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