Sentiment on Multifamily Production and Occupancy Improves in the Third Quarter

2021-11-18T10:24:39-06:00

Sentiment on the production of new and occupancy in existing multifamily housing improved in the third quarter, according to the latest results from NAHB’s Multifamily Market Survey (MMS).  The MMS produces two main indices.  The Multifamily Production Index (MPI) increased five points from the previous quarter to 53, while the Multifamily Occupancy Index (MOI) also increased by five points, to 75.  That’s the highest reading for the MOI since its inception in 2003. The MPI is a weighted average of three component indices measuring developer sentiment about production in different segments of the multifamily market: low-rent apartments supported by low-income tax credits or other government subsidy programs; market-rate rental apartments built to be rented at an unsubsidized market-clearing price; and for-sale units (i.e., multifamily condominiums).  Each component index lies on a scale on of 0 to 100, where a number above 50 indicates that more respondents report conditions are improving than report conditions are getting worse.  All three MPI component indices increased in the third quarter.  The component for low-rent apartments increased six points to 55, the component for market rate rental units rose nine points to 60; and the condo component posted a two-point gain to 47. Similarly, the MOI measures the multifamily housing industry’s sentiment on occupancy in existing apartments.  The MOI is also a weighted average of three components: for occupancy in class A, B, and C apartments.  Again, each component index lies on a scale from 0 to 100, with a break-even point at 50, where numbers above 50 indicate rising occupancy.  Two of the MOI’s components increased in the third quarter.  The index for occupancy in class A apartments increased 8 points to 77, while the index for class B apartments increased 4 points to 75.  Although the index for class C apartments declined by 3 points, to 70, all three component indices remain well above the break-even point of 50.  Moreover, as noted above, the current MOI of 75 is the highest the overall occupancy index has been since its inception. Strong demand and limited inventory of all types of housing are keeping occupancy strong in multifamily properties across the country.  The same factors are supporting production of new multifamily properties, although developers continue to deal with very significant supply-side challenges, like finding enough labor, materials and land to build on. The record-level MOI is consistent with the strong multifamily occupancy rates reported by the Census Bureau, which are now higher than they’ve been since the 1980s.  And an MPI back above 50 is consistent with multifamily housing starts, which have been running at a 460,000-plus annualized rate through the first three quarters of 2021—which should make 2021 the strongest year for multifamily production since the tax policy-driven surge of the 1980s.  As the economy continues to reopen, housing demand is rising in higher density markets, supporting both multifamily occupancy and production. For complete results from the Multifamily Market Survey, including the history of each index and its components back to the survey’s inception in 2003, please visit NAHB’s MMS web page. Related ‹ Year-over-Year Gains for Townhouse ConstructionTags: MMS, MOI, mpi, multifamily, multifamily market, multifamily market survey, multifamily occupancy index, multifamily production index, occupancy

Sentiment on Multifamily Production and Occupancy Improves in the Third Quarter2021-11-18T10:24:39-06:00

Supply-Side Disruptions Push Single-Family Production Down in October

2021-11-17T09:30:39-06:00

Single-family housing production lagged in October due to supply-chain effects for materials and ongoing access issues for labor and lots. Overall housing starts decreased 0.7% to a seasonally adjusted annual rate of 1.52 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

Supply-Side Disruptions Push Single-Family Production Down in October2021-11-17T09:30:39-06:00

Consumer Prices Post the Largest Gain in Three Decades

2021-11-10T12:24:03-06:00

By Jing Fu on November 10, 2021 • Compared to a year ago, on a not seasonally adjusted basis, consumer prices increased by 6.2% in October, the largest year-over-year gain since December 1990. Supply-chain constraints and strong consumer demand as the economy reopened have contributed to recent price increases. The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.9% in October on a seasonally adjusted basis, following an increase of 0.4% in September. Excluding the volatile food and energy components, the “core” CPI increased by 0.6% in October, after a 0.2% increase in September. In October, most component indexes increased. The indexes for energy (+4.8%), shelter (+0.5%), food (+0.9%), used cars and trucks (+2.5%), and new vehicles (+1.4%) showed sizeable monthly increases in October, while the indexes for airline fares (-0.7%) and for alcoholic beverages (-0.2%) declined. In October, the price index for a broad set of energy sources increased by 4.8% in October, after a 1.3% increase in September. Gasoline (all type) rose by 6.1% in October. It marks its fifth consecutive monthly increase. The food index rose by 0.9% in October, the same monthly increase as in September. The index for shelter rose by 0.5% in October, as the index for owners’ equivalent rent (OER) increased by 0.4% over the month, the largest monthly increase in the past five years. NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster (slower) than overall inflation, the real rent index rises (declines). The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components). The Real Rent Index decreased by 0.2% in October, after an increase of 0.2% in September. Over the first ten months of 2021, the monthly change of the Real Rent Index was -0.2%, on average. Related ‹ Building Materials Prices Post Record Year-To-Date Increase through OctoberTags: core cpi, cpi, energy prices, multifamily, owners’ equivalent rent, shelter

Consumer Prices Post the Largest Gain in Three Decades2021-11-10T12:24:03-06:00

2 Innovative Water Efficiency Strategies for Multifamily Properties

2021-11-03T13:21:50-05:00

As water costs continue to rise across the country, and some areas face droughts, aridification and water supply constraints, property owners — particularly owners of affordable housing — can benefit from additional water efficiency strategies. 

2 Innovative Water Efficiency Strategies for Multifamily Properties2021-11-03T13:21:50-05:00

Which Housing Markets Are Growing the Fastest?

2021-10-21T09:40:52-05:00

Home building has staged a slow, modest recovery over the last decade, following the Great Recession, with an accelerated uptick last year during the COVID-19 pandemic. Increased building activity can been seen in both the single-family and multifamily sectors, based on data for permits from the U.S. Census Bureau.

Which Housing Markets Are Growing the Fastest?2021-10-21T09:40:52-05:00

Top 20 Markets for Single-Family and Multifamily Permits: 2011-2020

2021-10-20T09:19:11-05:00

By Danushka Nanayakkara-Skillington on October 20, 2021 • Despite the volatility surrounding the recent COVID-19 pandemic, the housing market has shown remarkable resilience, fueled by demographic tailwinds and a housing shortage due to a decade of underbuilding.  Home construction slowed after 2007 as a result of the 2008 Great Recession, but home building staged a slow, modest recovery over the last decade, with a sharp acceleration in 2020 due to the pandemic. In 2020, according to the U.S. Census Bureau, builders applied for 979,360 single-family permits, which is 134% higher than the 2011 level of 418,498. For multifamily construction, 491,781 permits were issued in 2020. This is 139% higher than in 2011. At the state level, Texas takes the top spot as three out of the five largest single-family markets are located in the Lone Star state. The list below shows the top 20 metropolitan statistical areas for single-family permits issued between 2011-2020. Metropolitan Statistical Area Total Single-family Permits (Units #): 2011-2020 Houston-The Woodlands-Sugar Land, TX                                  363,067 Dallas-Fort Worth-Arlington, TX                                  292,219 Atlanta-Sandy Springs-Roswell, GA                                  196,745 Phoenix-Mesa-Scottsdale, AZ                                  179,479 Austin-Round Rock, TX                                  135,181 Charlotte-Concord-Gastonia, NC-SC                                  129,832 Washington-Arlington-Alexandria, DC-VA-MD-WV                                  127,967 Orlando-Kissimmee-Sanford, FL                                  118,372 Nashville-Davidson–Murfreesboro–Franklin, TN                                  108,311 Tampa-St. Petersburg-Clearwater, FL                                  103,117 New York-Newark-Jersey City, NY-NJ-PA                                    97,224 Raleigh, NC                                    90,779 Denver-Aurora-Lakewood, CO                                    88,937 Seattle-Tacoma-Bellevue, WA                                    86,362 Riverside-San Bernardino-Ontario, CA                                    84,803 Los Angeles-Long Beach-Anaheim, CA                                    82,350 Jacksonville, FL                                    81,635 Las Vegas-Henderson-Paradise, NV                                    80,024 Minneapolis-St. Paul-Bloomington, MN-WI                                    75,800 Chicago-Naperville-Elgin, IL-IN-WI                                    73,177 The map below shows total single-family permits issued for all 384 metropolitan statistical areas between 2011-2020. The dark colors denotes the highest number of permits issued while the lightest colors shows the lowest number of total permits issued. For multifamily construction, areas with a high population density had the highest number of permits issued in the last 10 years. The table below shows the top 20 metropolitan statistical areas which issued the highest number of total multifamily permits between 2011-2020. Metropolitan Statistical Area Total Multifamily Permits (Units #): 2011-2020 New York-Newark-Jersey City, NY-NJ-PA                                  377,761 Dallas-Fort Worth-Arlington, TX                                  217,621 Los Angeles-Long Beach-Anaheim, CA                                  185,732 Houston-The Woodlands-Sugar Land, TX                                  162,545 Seattle-Tacoma-Bellevue, WA                                 139,659 Washington-Arlington-Alexandria, DC-VA-MD-WV                                  117,474 Miami-Fort Lauderdale-West Palm Beach, FL                                  115,762 Austin-Round Rock, TX                                  111,636 Denver-Aurora-Lakewood, CO                                    86,515 San Francisco-Oakland-Hayward, CA                                    84,001 Atlanta-Sandy Springs-Roswell, GA                                    82,492 Phoenix-Mesa-Scottsdale, AZ                                    80,379 Chicago-Naperville-Elgin, IL-IN-WI                                    79,726 Boston-Cambridge-Newton, MA-NH                                    79,408 Orlando-Kissimmee-Sanford, FL                                    72,461 Minneapolis-St. Paul-Bloomington, MN-WI                                    68,306 Charlotte-Concord-Gastonia, NC-SC                                    66,560 Portland-Vancouver-Hillsboro, OR-WA                                    64,612 Nashville-Davidson–Murfreesboro–Franklin, TN                                    60,709 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD                                    59,271 The map below shows total number of multifamily permits issued for all 384 metropolitan statistical areas between 2011-2020. The dark color indicates the highest number of total multifamily permits issued while the lightest color shows the lowest number of multifamily permits issued. Related ‹ State and Local Property Tax Revenues Eclipse $700 BillionTags: home building, multifamily, single-family, state and local markets, state permits

Top 20 Markets for Single-Family and Multifamily Permits: 2011-20202021-10-20T09:19:11-05:00

FHFA lncreases Fannie Mae, Freddie Mac Multifamily Loan Purchase Caps for 2022

2021-10-13T13:33:30-05:00

The Federal Housing Finance Agency (FHFA) today announced that the 2022 multifamily loan purchase caps for Fannie Mae and Freddie Mac will be $78 billion for each Enterprise, for a combined total of $156 billion to support the multifamily market.

FHFA lncreases Fannie Mae, Freddie Mac Multifamily Loan Purchase Caps for 20222021-10-13T13:33:30-05:00

Consumer Prices Rise in September

2021-10-13T12:26:26-05:00

Inflation accelerated in September, as prices for food and shelter showed notable gains. Federal Reserve officials described the current inflation run as “transitory”, and attributed recent increases largely to supply-chain constraints and a surge in consumer demand as the economy reopened. And they expected “inflation pressures to ease as the effect of these transitory factors dissipated.” The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.4% in September on a seasonally adjusted basis, following an increase of 0.3% in August. Excluding the volatile food and energy components, the “core” CPI increased by 0.2% in September, after a 0.1% increase in August. The indexes for new vehicles (+1.3%), household furnishings and supplies (+1.3%), and motor vehicle insurance (+2.1%) rose in September, while the indexes for apparel (-1.1%), and several travel-related components including airline fares (-6.4%), lodging away from home (-0.6%), and used cars and trucks (-0.7%) all declined over the month. In September, the indexes for food and shelter contributed more than half of the monthly increase in the headline CPI. The food index rose by 0.9% in September, the largest monthly gain since April 2020. The index for food at home jumped by 1.2%, while the index for food away from home rose by 0.5% over the month. The index for shelter rose by 0.4% in September. The index for owners’ equivalent rent (OER) increased by 0.4% over the month, the largest monthly increase in the past five years. Meanwhile, the price index for a broad set of energy sources increased by 1.3% in September, after a 2.0% increase in August. Gasoline (all type) rose by 1.2% in September, slower than a 2.8% increase in August. During the past twelve months, on a not seasonally adjusted basis, the CPI rose by 5.4% in September, following a 5.3% increase in August. The “core” CPI increased by 4.0% over the past twelve months, the same increase as the previous month. The food index rose by 4.6% and the energy index rose by 24.8% over the past twelve months. NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster (slower) than overall inflation, the real rent index rises (declines). The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components). The Real Rent Index rose by 0.2% in September, the same increase as in August. Over the first nine months of 2021, the monthly change of the Real Rent Index was -0.2%, on average. Related ‹ Stable Conditions for Construction Job OpeningsTags: core cpi, cpi, energy prices, multifamily, owners’ equivalent rent, shelter

Consumer Prices Rise in September2021-10-13T12:26:26-05:00

Construction Reversal: Single-Family, Multifamily Units Under Construction

2021-09-22T16:18:22-05:00

A reversal is taking place in the construction pipeline. Since early 2013, there have been consistently more multifamily units (residences within 2+ unit properties) under construction relative to single-family homes. This was due to multifamily construction recovering more quickly in the years after the Great Recession, as well as years of underbuilding in the single-family sector. However, as of July, there are roughly equal counts of units under construction in the two sectors of the residential market, sparked by an expansion of demand for single-family homes. In the wake of the Great Recession, there were 289,000 multifamily units in various stages of construction during February 2013. For that month, there were 292,000 single-family homes being built. From that time until June 2021, there were consistently more multifamily units being constructed than single-family homes. The gap was largest in January 2017, when there were 621,000 apartments under construction, compared to 443,000 single-family homes. The gap has been diminishing since early 2017 and as of June it closed, thanks due to an acceleration of single-family home building during the second half of 2020. As of July, there were 690,000 apartments under construction…and 691,000 single-family homes. There are a lot dynamics underneath these statistics of course, including longer multifamily build times, lengthening construction times for all kinds of housing, single-family construction cooling in 2021, and a rebound for multifamily development this year. On net, we could see these data series remain close for the next few quarters. Nonetheless, this stat does reveal the degree of gains for single-family home building at the end of 2020 and the start of 2021, as well the lengthening of cycle construction times in the sector. As a result, in August there were 702,000 single-family homes in the construction pipeline: the most since July 2007. Related ‹ Federal Reserve: Closer to TaperTags: economics, home building, housing, multifamily, single-family

Construction Reversal: Single-Family, Multifamily Units Under Construction2021-09-22T16:18:22-05:00

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