SVN® Internation Corp. Economic Update – Keeping our clients up-to-date about the latest real estate landscape trends.
In the closing months of 2023, the US economy showcased resilience and positive shifts across various sectors. The housing market experienced a notable drop in median housing payments, down $400 (-14%) from its October peak, fostering renewed interest among homebuyers. This decline, attributed to a consistent drop in mortgage rates, propelled a 10% increase in Redfin’s Demand Index. Concurrently, the real estate landscape witnessed a 10% uptick in new listings compared to the end of 2022, creating a favorable environment for potential buyers.
The single-family rental (SFR) market also displayed significant trends, with record-high construction starts in Q2 2023 and decreasing cap rates. Despite a slowdown in rent growth, occupancy levels remained strong, averaging 94.4% in Q3. Meanwhile, investor purchases of single-family properties declined, though at a slower pace in 2023 than seen in 2022. On the construction front, both residential and non-residential sectors contributed to the positive economic outlook, with non-residential construction spending up by 18.1% over the past year, fueled by a surge in manufacturing-related construction. Additionally, commercial mortgage-backed securities (CMBS) delinquencies decreased in December, reversing previous trends, and the retail and office sectors led the decline, contributing to an overall optimistic start to 2024.
Click below to read more from the Redbook Index, FOMC meeting minutes, and the Census Bureau’s latest employment report.
