Daily Dose of Real Estate for August 21
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Daily Dose of Real Estate for August 21

Daily Dose of Real Estate - August 21, 2024

Welcome to the Daily Dose of Real Estate, your go-to source for the latest updates and insights in the real estate market. In today's edition, we cover the most recent trends in residential, mortgage, commercial, and multifamily real estate markets. Stay informed with our curated selection of top stories and expert analyses.

Residential Real Estate Markets

1. Market Update - August 21, 2024

The National Association of Realtors (NAR) has released its latest market update, indicating a slight increase in home sales for July 2024. The median existing-home price for all housing types in July was $406,700, up 1.9% from July 2023. Lawrence Yun, NAR's chief economist, noted, "The housing market is stabilizing as mortgage rates have begun to decline, and we expect this trend to continue into the fall." Inventory levels remain tight, but new listings are gradually increasing (NAR ).

2. Housing Market Predictions for 2024

Forbes reports that U.S. home prices posted a 5.9% annual gain for May, down from 6.4% in April. The market is expected to gain momentum as mortgage rates drop, making homes more affordable. However, affordability remains a constraint, and the market will only see renewed momentum once mortgage rates drop enough to ease affordability challenges (Forbes ).

3. Single-Family Home Sales Surge in August 2024

According to the latest data from the U.S. Census Bureau, single-family home sales surged by 12% in August 2024 compared to the previous month. The median sales price for new homes sold in August was $420,000, reflecting a 4% increase from July. This surge is attributed to lower mortgage rates and increased buyer confidence (U.S. Census Bureau ).

Mortgage Markets

1. Scotiabank Lands JPMorgan Team for Mortgage Capital Markets Unit

Bank of Nova Scotia has recruited a team of seven from JPMorgan Chase & Co. in Texas to launch a new mortgage capital markets business in Houston. This move is part of Scotiabank's strategy to expand its U.S. structured finance business (BNN Bloomberg ).

2. Mortgage Applications Increase in Latest MBA Weekly Survey

The Mortgage Bankers Association (MBA) reported a 2.3% increase in mortgage applications for the week ending August 18, 2024. The Refinance Index increased by 3%, while the Purchase Index saw a 2% rise. This increase in applications is a positive sign for the mortgage market, indicating a potential uptick in home buying activity (MBA ).

3. Mortgage Rates as of August 21, 2024

As of August 21, 2024, the current mortgage rates are 6.52% for a 30-Year Fixed-Rate Mortgage, 5.88% for a 15-Year Fixed-Rate Mortgage, and 6.19% for a 5/1 Hybrid Adjustable-Rate Mortgage (ARM). These rates reflect the ongoing fluctuations in the mortgage market, influenced by economic data and market conditions (Mortgage News Daily ).

Commercial Real Estate Markets

1. Manhattan Real Estate Market Reports

Newmark's latest report indicates improved quarterly absorption and stronger leasing activity in Manhattan's office market. The availability rate modestly declined to 19.4%, with 16.5 million square feet of leasing recorded in the first half of 2024, up 19.8% from the first half of last year. Class A assets comprised 71.4% of Manhattan activity, with Midtown accounting for 74.8% of second-quarter activity (Newmark ).

2. Commercial Real Estate Direct Insights

Commercial Real Estate Direct provides the most up-to-date market intelligence on the mortgage business, equity raising, investment sales, and CMBS. Recent highlights include:

  • EQT Exeter Pays $170M for Industrial Property Near Harrisburg, PA: EQT Exeter Real Estate Income Trust has paid $170.52 million for a 1.22 million-square-foot industrial property.
  • SitusAMC Buying Stake in CMBS.com : SitusAMC is acquiring a minority stake in CMBS.com , integrating mortgage-origination platforms (Commercial Real Estate Direct ).
  • Occupancy Woes Prompt Transfer of $111M Loan on Brooklyn Office to Special Servicing: The $111 million CMBS loan against a Brooklyn office property has transferred to special servicing due to expected default (Commercial Real Estate Direct ).

Multifamily Real Estate Markets

1. Class A and C Apartments Lead Orange County’s Multifamily Market in 2024

Orange County's multifamily market is expected to maintain its momentum, with a projected 1.2% inventory growth. The demand for upper-tier units remains strong, particularly in coastal cities and professional business hubs. On the other end, demand for lower-cost apartments is equally robust, with tight vacancy rates and high demand in areas like Santa Ana and Buena Park-Cypress (The Registry SoCal ).

2. Multifamily Market Outlook for 2024

The multifamily market is expected to see a slight rise in the delivery volume of new units, translating to a 1.2% inventory growth. Despite the introduction of new units, the overall market vacancy rate is anticipated to increase modestly, reaching 4.1% by the end of the year. Rental rates are expected to notch a minimal gain, pushing the average effective rate to $2,837 per month (The Registry SoCal ).

3. Multifamily Market Remains Resilient Amid Volatility, High Supply

Freddie Mac Multifamily Research reports that the multifamily market remains resilient despite volatility and high supply. Strong demand fundamentals are insulating the market, with demographic trends and a high barrier-to-entry in the for-sale housing market supporting rental housing demand. However, a temporary oversupply of apartment units in several markets could suppress rent growth and occupancy rates in the second half of the year and into 2025 (Orion Prop ).

CMBS/REIT Markets

1. Christine Poole’s Top Picks for August 20, 2024

Christine Poole, CEO and managing director with GlobeInvest Capital Management, discusses her outlook for the markets. Her top picks include Home Depot, Visa, and Canadian Apartment Properties REIT. The fundamentals in the Canadian apartment rental market remain positive, supported by a strong influx of immigration (BNN Bloomberg ).

2. U.S. REITs Raise $12.5B in Debt, $4.1B in Equity in Second Quarter

U.S. REITs raised $12.5 billion from secondary debt offerings and $4.1 billion from common equity and preferred equity in the second quarter of 2024. This indicates that capital markets are open for REITs, allowing them to raise capital in equity and debt markets. The consistent quarters of debt issuance have occurred amid interest rate stabilization (Commercial Observer ).

3. Wells Fargo to Sell Most of Its CRE Loan Servicing Business to Trimont

Wells Fargo & Co. agreed to sell most of its commercial mortgage servicing business to Trimont LLC, ceding the title of biggest US commercial and multifamily mortgage servicer to the Atlanta-based firm. This move is part of Wells Fargo's strategy to focus on core businesses and reduce exposure to non-core assets (Bloomberg ).

Stay tuned for more updates in the next edition of the Daily Dose of Real Estate! Please check us out at www.impactcapitoldc.com

SitusAMC Impact Capitol DC Mortgage Bankers Association The Mortgage Collaborative National Association of REALTORS? National Mortgage News HousingWire National MI Federal Reserve Board Federal Reserve Bank of New York Federal Reserve Bank of Chicago Federal Reserve Bank of Atlanta Federal Reserve Bank of Minneapolis Federal Reserve Bank of San Francisco Federal Housing Finance Agency Federal Housing Administration and HUD Office of Housing Fannie Mae Freddie Mac CNBC Fox Business Network Yahoo Finance

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