This November, California voters will decide if cities and counties can impose rent control on all apartments and single-family homes. If approved, the measure – Proposition 33 – could create unintended consequences for renters while also broadly impacting apartment owners and builders. Foremost among these could be the impact to development. Rent control could alter developers’ projected returns and suppress the long-term supply of apartments, prolonging the state’s housing shortage....

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Housing market remains in a state of disruption. Existing home sales slid to a six-month low in June 2024 as the median price eased by just 0.2 percent from May's all-time high and the average 30-year fixed-rate mortgage held near 7 percent. Softer purchase activity signals that buyers should gain leverage in the current climate, although a lack of entry-level home  ...

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Falling commodity prices reflect cooling economy. While pricing pressures remain above target 27 months into the Federal Reserve's current monetary tightening cycle, meaningful relief is beginning to show. Annual growth in the commodities less food and energy index — which captures pricing changes for non-necessity items such as recreation, vehicles and apparel — has been in negative territory ...

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National apartment absorption surged from January through March 2024, reaching the strongest first quarter tally on record. Vacancy continued to rise amid aggressive construction, however, dictating greater concession use in development-heavy markets. All-time high home prices in early 2024 and persistently elevated interest rates nevertheless spotlight the cost-saving benefits of renting…

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Higher mortgage rates influence buyer and seller motivation. The average 30-year fixed-rate mortgage climbed to a five-month high of 7.0 percent in April 2024, as the market responded to persistent inflationary pressures and Federal Reserve policy. Increasing borrowing costs, meanwhile, encouraged more prospective buyers to sit tight ...

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Key CPI measures resume descent. Annual growth in the headline and core consumer price indices — the latter of which omits food and energy — lowered to 3.4 and 3.6 percent in April, respectively. While bumpy inflation over the last few months curbed Wall Street expectations for near-term overnight lending rate cuts by the Federal Reserve, April's cooler ...

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Key GDP growth contributors post positive results. Real gross domestic product increased at an annual rate of 1.6 percent during the first quarter of 2024. While this is a deceleration from the 3.4 percent rate from the final quarter of last year, the economy still grew in several areas. U.S. residents continued to spend..

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Energy cost spike bumps up inflation. Mounting costs for gasoline and electricity kept overall inflation elevated over the 12-month period ending in March. The headline CPI measure grew by 3.5 percent during the span, ticking up as the energy index moved into positive territory for the first time since February 2023. Geopolitical conflict ...

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More prospective buyers and sellers coming to terms. The number of existing single-family homes available for purchase swelled to a 40-month high in February 2024, reaching a level not seen since late 2020 and providing prospective buyers with new opportunities. Along with this increase of homes on the market, the pace of sales escalated in February to ...

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Inflation trends cloud Fed's path. Still-elevated inflation is leading Wall Street participants to delay expectations for the Federal Reserve to start cutting interest rates this year — shifting from spring to summer. Alongside strong hiring in the opening months of 2024, February's higher headline CPI reading contributed to the Federal Open Market Committee's ...

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Window of stronger buyer demand lifted home prices. The median sale price of an existing single-family home surged to a record high of $405,600 in January 2024, after holding under $400,000 for the majority of the past two years. That month-over-month growth was the largest since May 2022, a price escalation that was primarily a result of ...

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Inflation metrics present mixed bag. The headline Consumer Price Index rose 3.1 percent over the year ended January, down 30 basis points from the December reading. Falling energy prices and flattening costs for food helped slow inflation, as supply chains remained fluid despite ongoing global conflict. However, when stripping these indices out ...

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2024 Multifamily U.S. Investment Forecast

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