This is a narration of our weekly Rent and Operating Trends Report.As the U.S. economy continues to defy expectations both from a strong employment market and a persistent inflation perspective, economists are asking what is driving these trends. Many point to a recent report from the Congressional Budget Office indicating that more than 3 million immigrants entered the U.S. last year, well above recent years and projections. The labor force needs workers, as the data has shown, with more and more jobs being created, while the unemployment rate has stayed steady and even increased slightly. However, with more jobs being created and wages increasing modestly, more workers are able and comfortable consuming. This is leading to elevated inflation figures and likely a delay in any interest rate cuts from the Federal Reserve. Apartment fundamentals are steadily improving, although the divergence between the leading indicators; traffic and leasing, and the secondary indicators; occupancy and rent, is continuing to widen. Leading indicators have been increasing slowly this year, while occupancy has been growing at a much steadier pace. The number of units available to rent is also improving and is the only key indicator tracked by Radix that is in better shape than it was a year ago. This data continues to point toward the notion that residents are renewing leases at a higher rate, shopping around for fewer apartments and staying put, after several years of elevated movement.Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.The macro economy continues to defy economist expectations and remains in very strong condition as we start the second quarter. March job growth exceeded 300,000, making it the strongest month of the year and bringing year-to-date job growth above 800,000. For context, at the beginning of the year, the Wall Street Journal polled 64 economists to get their expectations for job growth this year. 26 of the 64 predicted fewer than 800,000 jobs would be created in the entire year, let alone the first quarter. If the employment market remains on its current pace, multifamily demand should outperform as well, easing the pressure on several apartment operators. Yet the strong economy may also cause the Fed to delay or reduce the number of interest rate cuts this year. A number of Fed governors have spoken recently and shared their intent to keep rates where they are, especially as inflation remains slightly elevated in the 3% range and employment continues to be extremely strong. While many prognosticators expected the first rate cut in May or June, it will now likely be pushed into Q3 or later.Leading multifamily indicators were flat last week, while rent and occupancy both increased. Ideally for operators, traffic and leasing activity will begin to rise again, as both metrics lag their levels from last year. With asking rents falling in several markets, operators have shifted their focus to retention and renewing leases for existing tenants. As such, occupancy has grown slowly but steadily, while traffic has lagged its normal seasonal levels.Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.The U.S. economy ended the first quarter on strong footing with most economic indicators reporting growth. The final estimate of Q4 GDP showed the economy expanded at a 3.4% annualized rate, bringing the 2023 full year growth to 3.1%. Despite restrictive monetary policy, economic growth continues to outperform. Job growth remains strong, and inflation continues to moderate. The equity markets are doing well, as the S&P 500 is up more than 10% so far this year. As American consumers and businesses continue to adapt to life in a new and higher interest rate paradigm, the economy has not yet shown signs of deteriorating.Multifamily fundamentals continue to increase as we move into the second quarter, however, the pace of growth is not fast enough to keep up with last year’s results. All key indicators remain negative on a year-over-year basis at the national level. Furthermore, the divergence between markets with strong performance and markets searching for a bottom continues to widen as the effect of new supply weighs heavily on key markets in the sunbelt.Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.As expected, the Federal Reserve kept interest rates steady last week, but many Fed officials still predict multiple rate cuts this year. Investors responded favorably and the stock market reached new highs after the announcement. In addition to lowering the mortgage rate for single-family home purchases, lower interest rates would ease pressure from monthly credit card payments for consumers and businesses. According to the Fed, the average interest rate on a commercial bank credit card was 21.5% in the fourth quarter of 2023, the highest in at least 30 years and up from 14.9% at the end of 2019. Many businesses also leverage lines of credit, and in aggregate, the higher rates could have an impact on job growth.Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.Domestic migration and population growth are key drivers of multifamily demand, and the Census Bureau released its 2023 county level population statistics last week. These data provide insight into which local areas are experiencing the fastest growth and which areas are struggling with outmigration. Overall, many of the same trends we have experienced in the past few years have continued, with sunbelt counties in Florida, Texas, Arizona, and the Carolinas taking the lion’s share of growth. Counties from large gateway markets in Los Angeles, Chicago and New York led the way for outmigration. Yet the pace of growth and the pace of decline slowed in 2023 from previous years. Given the severity of the new supply pipeline in the south, slowing demand growth will likely extend the lease up timelines and recovery for many of these markets. Conversely, slower population declines in gateway markets, set against a landscape of relatively limited supply may lead to continued outperformance in places like Chicago. We will be covering the domestic migration and population growth data in further detail in future reports and social media posts. Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.Despite a significant downward revision to the January numbers, the February jobs report provided further evidence of an extremely robust labor market. 275,000 jobs were added last month, and more than half a million jobs have been added so far this year. The unemployment rate ticked up modestly but remains low by historical standards. Wage gains increased 0.1% last month and 4.3% from February of 2023, providing further evidence that inflation is slowing. Fed chair Jerome Powell gave a very measured statement last week in his testimony to Congress, saying that he expects rates to come down in 2024 but is not ready to say when the first rate cut will be.Apartment fundamentals were up across the board, as the multifamily market continues its growth to start the year. All key metrics increased last week for the first time in months. Traffic, occupancy, and rent remain below their levels from this time last year, but the recent growth has provided optimism for a strong year ahead. Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.The U.S. economy remains on firm and stable footing through the early part of 2024. GDP was revised slightly downward last week, but economic growth for the fourth quarter remains well above the long-term average. A few Fed governors will speak this week, highlighted by Chair Powell’s Congressional testimony on Thursday. We will see the February jobs report on Friday, which will provide further indication on the strength of the labor market after a banner month in January. Multifamily fundamentals posted another strong week as we move into March. As the weather improves across much of the nation, March is typically the first month of the prime leasing season, which tends to last for three to four months. Apartment performance is growing steadily as we head into leasing season, which is a good sign for most markets. I expect to see steady growth in markets that do not face extreme supply challenges. In those markets battling new supply, I will look for stabilization as a sign that these high demand markets can weather the current storm and emerge strong next year when new deliveries start to slow. Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.The 2024 presidential election is about 8 months away and political and fiscal issues are beginning to take center stage for the American consumer. The economy remains strong with steady GDP growth, a tight labor market and generally softening inflation, but issues including a government shutdown, international aid and foreign policy are becoming focal points. With a highly polarized populous I would not expect any radical change regardless of the outcome of the election, but there will certainly be significant discourse surrounding both candidates and the economy in the months to come.Multifamily fundamentals are largely apolitical as well. While there is some discussion at the local level surrounding rent controls and other regulations in our industry, I would be surprised to see any sweeping national changes that would prohibit the free market from governing. Supply and demand are still driving apartment performance, with the current supply wave continuing to impact fundamentals in most markets.Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.In the wake of a higher-than-expected inflation report, the theme from many Fed Governors last week was patience in determining when the first interest rate hike would be. The Consumer Price Index came in higher than many economists expected for January, which led to an equity market sell off and an increase in treasury yields. Both are indicators that the market expects the Fed to wait longer than previously anticipated before dropping interest rates. Long term inflation continues to come down however, and the annualized CPI fell to 3.1%.  The multifamily market had another strong week last week, as rents and occupancy rates rose in many markets across the country. The leading indicators, including traffic and leasing were mostly flat, but key operating metrics continue to put forth a strong showing through the first six weeks of the year. Occupancy has been the most consistent outperforming metric thus far, as demand continues to hold up against the pressure of new supply. Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.It was a quiet week in the economy last week, and most indicators continued their slow and steady growth. All eyes will be on inflation this week from a quantitative perspective. From a qualitative perspective, many of the Fed Governors are slated to speak at various events. While I don’t suspect any specific commentary on the timing of interest rate cuts, the tone and sentiment of each Governor’s comments will be noteworthy. Later this week, the homebuilder sentiment as well as housing starts and building permits data will be released, which should provide additional context into the strength of the housing market. Multifamily fundamentals had another strong week last week, led mostly by demand indicators. Occupancy continues to grow in 2024, and the number of units available to rent is improving as well. Traffic picked up modestly last week as did net effective rent and revenue per available unit (RevPAU). The only declining metric was leases signed, which fell slightly, but remained in decent position halfway through the first quarter.Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.In a rare interview on Sunday evening, Fed Chair Jerome Powell explained on 60 Minutes that the Fed is now planning its first interest rate cut since 2020. Most economists expected rate cuts in 2024, however it is abnormal for the Fed Chair to speak publicly on the matter, especially outside of a policy meeting press conference. While Powell stopped short of estimating when the first cut would come, he inferred that inflation is now under control and he expects annual inflation figures to continue declining, as lagging components, such as housing costs, begin to hit the inflation data. I believe we will see the first rate cut in late Q2 followed by two additional cuts in the second half of the year, but those decisions will be data dependent as we progress through the year. However, it is now clear that the Fed will be cutting rates and Powell took a demonstrative step toward transparency, as he shared his views with the public.Multifamily performance had another strong week last week with all key metrics increasing from the week prior. Occupancy and traffic led the way once again, and average traffic nationwide is above 7 tours per property, while occupancy climbed above 93.7%. Rent, RevPAU and leases signed all increased modestly as well. Demand appears strong as we move into February, and another steady month should set up nicely for the 2024 leasing season. Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.Will you be at NMHC this week? If so, come find us. Blerim Zeqiri, Brad Cribbins, Jay Denton, and I will be at the Apartment Strategies conference and the annual meeting. We would love to share what 2024 has in store for Radix and the multifamily industry.The economy chugs along with a strong foundation in employment and improving inflation metrics. The Personal Consumption Expenditures Index was released on Friday showing that prices have increased 2.9% from a year ago. The Fed prefers to watch the PCE, and this measure now sits within the target range for policy makers, as they mull the next step on interest rates. Fed officials will vote on monetary policy at their meeting this week and while few expect a change in rates at this meeting, many economists are speculating when the first rate cut will come. I believe the Fed will start easing monetary policy in the second quarter, but softer jobs numbers or lower inflation reports may accelerate the process for the first rate cuts since COVID.Property fundamentals continue to improve in the short term, while annual growth remains negative for most key metrics. Occupancy is showing a similar trend to last year, and is holding firm, despite expectations of continued declines. Traffic and leasing are improving, indicating a potential early start to the 2024 leasing season. Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.The Radix team will be at the NMHC annual meeting next week and we would love to see you there. If you’ll be in attendance please reach out. We will be sharing market insight and forecasts as well as upcoming product updates. We are also excited to open several new markets in Radix Research. Our coverage continues to expand across the southeast, Midwest and West Coast, and new markets include Detroit, Columbus, Sacramento, and Huntsville among others.Evidence of a strong economy continues to permeate the closing reports from 2023. December retail sales were very strong, increasing 0.6% monthly and 5.6% on an annually. The 2023 holiday season was better than expected, proving that the American consumer is healthy and spending. Consumer activity drives nearly three quarters of GDP, and the strong consumer activity is a positive indication for fourth quarter economic output. Prices may be on the rise because of the strong spending, as we saw the December CPI increase faster than estimates. The Personal Consumption Expenditures Index, the measure of inflation preferred by the Federal Reserve, will be released on Friday, providing further indication of pricing pressure across the market. Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.The U.S. economy was thrown a slight curveball last week when the December Consumer Price Index came in higher than expected. Inflation increased at an annualized rate of 3.4% marking a modest uptick from previous months. Driving the growth was a 0.4% increase in the shelter index, which relates directly to the cost of housing. However, there is a significant lag in the shelter data for the CPI, and as we’ve reported, housing costs both for rent and for sale homes continue to decline. The energy index also contributed to a large portion of the monthly increase; however, oil prices have been coming down steadily and are near a six-month low. I do not see any significant inflation concerns over the long term, however if inflation remains at its current level, it will likely delay any interest rate cuts from the Fed.Multifamily fundamentals had another flat week last week, which is a positive sign as we begin the year. Traffic registered a slight increase as apartment renters begin the search for their next home. With a healthy economy and a strong labor market, we are beginning to see housing demand return. Multifamily demand has grown, as persistently high mortgage rates have kept some would-be home buyers in the rental market. Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.The first week of 2024 was a mixed bag from an economic perspective. Major equity indices sold off to start the year, led by the tech sector. There has been some concern that the stock market became overvalued after a surprising and very strong 2023. However, late last week the December jobs numbers supported the continued strength of the economy. In December roughly 216,000 new jobs were created bringing the 2023 total to 2.65 million new jobs. Government and Health Care led the way last month adding 90,000 of the 216,000 new positions. The unemployment rate has held steady at 3.7%.Multifamily fundamentals had a quiet week last week, as the leading indicators edged downward but rent and occupancy were mostly unchanged. Occupancy remains the focal point for the industry as we weather the winter slowdown. Based on last year’s atypical trend, where occupancy was flat through the first half of the year before falling in the summer and fall, I will be interested to see how it performs this year. Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.The U.S. economy had a surprisingly strong 2023, as prognosticators initially forecast a high chance of recession at the beginning of the year. Instead, equity indices performed very well, with the S&P 500 rising 24%, job growth continued its steady expansion, and economic growth outperformed nearly all expectations. A key driver through it all was the consistent decline in prices as inflation returned to the 2-3% range by the end of the year... Explore our webpage for more insights and resources:https://bit.ly/Radix_Website

This is a narration of our weekly Rent and Operating Trends Report.As we approach the end of 2023, this week’s report will be our last of the year. As such, I looked back over the prior 51 weeks at some of the key trends, predictions and observations we made to identify where we got it right and where we missed the mark. From an economic perspective, the year began on very shaky footing. I predicted a continued economic slowdown and a rising potential for a recession. Neither occurred this year, and in fact the macro economy strengthened as the year went on. Inflation came down as we anticipated but it did not negatively impact the employment market, consumer activity or GDP. GDP had its strongest quarter in a few years in Q3. We anticipated the job market would remain the backbone of the economy and while it has softened this year, overall job growth, especially in light of the low unemployment figures, remains quite strong. I predicted that the Fed would continue raising interest rates and remain reactionary, yet to their credit, they saw the slowing trend in inflation and kept rates constant since July. The illusive soft landing now appears doable, when twelve months ago most economists including myself predicted otherwise... Explore our webpage for more insights and resources:https://bit.ly/3XBKJGH.

This is a narration of our weekly Rent and Operating Trends Report.The Fed is holding its final meeting of the year this week and they are likely to leave interest rates unchanged. After rapidly increasing interest rates through the first half of the year, the Fed has now kept rates stable since July. Many market prognosticators expect rates to drop next year, with some calling for rate cuts as soon as the spring. Given the strength of the economy, I would not expect to see rate cuts until late next year at the earliest. The November Consumer Price Index was released this week, and while inflation inched downward on an annual basis to 3.1%, it remains slightly above the Fed’s target. Higher inflation will keep the Fed from cutting rates, however I do not see this report as a catalyst to raise rates either. Multifamily fundamentals were mixed last week. Of note, occupancy was flat on a week-over-week basis for the first time in months. One week is not enough to declare a trend, yet stabilizing occupancy would be a great achievement for the industry. Leasing activity was also flat last week while traffic and NER dipped slightly. Another potential point of optimism is that annual growth figures are improving. Occupancy is down only 69 basis points and NER is down only 140 basis points. Both figures were deeper in negative territory over the past few months.Explore our webpage for more insights and resources:https://bit.ly/3XBKJGH.

This is a narration of our weekly Rent and Operating Trends Report.The U.S. economy was given another boost last week as Q3 GDP was revised upward to an annualized rate of 5.2%, making the rate of growth last quarter more than double the rate for the first half of this year. Q3 was also the strongest quarter for economic growth since 2021 when the U.S. economy was still working through the volatile declines and subsequent growth resulting from COVID-19. Consumer activity remains healthy and the employment market continues its upward climb. November job growth will be released on Friday, but I expect another steady month of job gains. Weekly unemployment claims remain in line with long-term averages. Explore our webpage for more insights and resources:https://bit.ly/3XBKJGH.

This is a narration of our weekly Rent and Operating Trends Report.It was a fairly quiet week in the U.S. economy as the Thanksgiving holiday limited data releases last week. Existing trends continued from the prior week as the 10-year treasury continued to drift lower. The yield on the 10-year is now 4.42%, nearly 60 basis points below its recent peak in mid-October. Oil prices continue to fall, with WTI Crude Oil trading around $75 per barrel, down from $93 in recent months. The slowdown in oil prices will help keep inflation at bay and potentially allow the Fed to end its monetary tightening. GDP will be released this week and November job gains will be reported next week. Key inflation indicators will also be announced prior to the Fed’s next interest rate announcement.Multifamily fundamentals have not deviated from their slow decline. Leading indicators were mostly flat last week, while lagging indicators continued to fall. The recent speculation that interest rate increases may be finished has spurred some excitement in the transaction market, as buyers and sellers are beginning to come together on deal terms. Transaction activity has not increased meaningfully yet, but the combination of maturing loans, expiring rate caps and stability in the interest rate market will likely bring an uptick in transaction activity. Explore our webpage for more insights and resources:https://bit.ly/3XBKJGH.