Daily Dose of Real Estate for October 4
Welcome to the "Daily Dose of Real Estate," your comprehensive source for the latest updates and insights into the real estate and mortgage markets. Our newsletter provides in-depth coverage of economic data, residential and commercial real estate trends, mortgage market movements, and more, ensuring you stay informed about the factors shaping the industry today.
Key Takeaways
- Economic Data: Jobless claims remain steady, with potential impacts from ongoing strikes and natural disasters.
- Residential Real Estate: The housing market faces challenges with 'shrinkflation' and climate risks.
- Mortgage Markets: Rates are fluctuating, with potential changes on the horizon due to Federal Reserve actions.
- Commercial Real Estate: The office market shows signs of stabilization after significant discount sales.
- REITs: Outperforming broader markets, driven by strategic sector investments.
General Economic Data & News
- New Jobless Claims 225K: Lukewarm Ahead of Friday's BLS Report Jobless claims have risen slightly to 225,000, influenced by factors such as the East Coast/Gulf Coast port strike and Hurricane Helene's aftermath. Despite these challenges, the labor market remains relatively stable, with continuing claims at 1.826 million, marking a third consecutive week below 1.83 million. The upcoming Bureau of Labor Statistics report is expected to show 150,000 new positions added last month, with the unemployment rate holding at 4.2% Zacks.
- Interested in Tracking the U.S. Labor Market? Here Are Some Key Indicators The U.S. labor market shows resilience, with job openings increasing by 56,000 to 9.6 million in September. However, the impact of strikes and natural disasters may distort these figures in the short term Fannie Mae.
- Stocks Decline as Economic Data and Port Disruptions Stir Inflation Fears Stocks have declined due to economic data and port disruptions, raising inflation concerns. The Dow Jones Industrial Average fell over 500 points, with the Nasdaq and S&P 500 also experiencing declines Fox Business.
Residential Real Estate Markets
- Housing Market ‘Shrinkflation’: Why Homes Are Getting Smaller—but You’ll Pay About the Same Price The trend of 'shrinkflation' in the housing market continues, with the median square footage for new construction dropping from 2,098 in 2022 to 2,036 in 2023. Builders are responding to affordability challenges by constructing smaller homes, a trend likely to persist due to shifting demographics and economic pressures Realtor.com.
- A New Report Illustrates Just How Stuck the Housing Market Is The U.S. housing market is experiencing its lowest turnover rate in at least 30 years, with only 2.5% of homes changing hands in the first eight months of 2024. This stagnation is attributed to high mortgage rates and low inventory levels RealClearMarkets.
- More New Listings at Major Climate Risk Now Than Five Years Ago Zillow has introduced climate risk data to its real estate listings, highlighting potential hazards such as floods, wildfires, and extreme temperatures. This feature aims to help buyers assess the impact of natural disasters on properties CREtech.
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Mortgage Markets
- Mortgage Rates Tick Up Mortgage rates have seen slight increases, with the average 30-year fixed rate at 6.26% and the 15-year fixed rate at 5.47%. These fluctuations are influenced by Federal Reserve rate cuts and economic data Bankrate.
- Consistently Higher Rates Since Fed Rate Cut, But Friday Could be BIG Despite recent Federal Reserve rate cuts, mortgage rates remain elevated. However, potential changes are anticipated, which could impact borrowing costs significantly CNN.
- Mortgage Applications Report According to the Mortgage Bankers Association, mortgage applications decreased by 6.0% for the week ending September 29, 2023. The Market Composite Index, a measure of mortgage loan application volume, decreased on a seasonally adjusted basis, with the Refinance Index down 7% and the Purchase Index down 6% from the previous week Mortgage Bankers Association.
Commercial Real Estate Markets
- US Office Real Estate Market Shows Signs of Bottoming After Big Discount Sales The U.S. office real estate market is showing signs of stabilization, with significant discount sales indicating a potential bottoming out. This trend is driven by strategic investments in top-tier properties Reuters.
- CRE This Week - What's Impacting the United States Market? The Altus Group provides an overview of the factors currently impacting the U.S. commercial real estate market, including economic shifts and policy changes Altus Group.
- Counselors of Real Estate 2025 Prediction? Plenty of Uncertainty The commercial real estate market faces uncertainties heading into 2025, with potential challenges in financing and market dynamics REJournals.
- D.C. Council Passes Emergency Bill To Address Unpaid Rent Crisis The D.C. Council has passed an emergency bill aimed at addressing the unpaid rent crisis, providing relief measures for tenants and landlords Bisnow.
CMBS / REIT
- REITs Outperformed Broader Markets in the Third Quarter The FTSE Nareit All Equity REITs Index rose 16.8% in the third quarter, continuing to outperform the broader stock market. This performance is attributed to strategic investments in sectors like timberlands and data centers REIT.com.
- REIT Industry Financial Snapshot The REIT industry has maintained strong financial health, with low leverage and robust dividend yields, making it an attractive option for income investors NAReit.
- The Ratings View S&P Global's latest ratings view suggests a stable outlook for the REIT sector, with positive trends in credit ratings and financial performance S&P Global.
This newsletter provides a detailed and up-to-date overview of the real estate and mortgage markets, offering valuable insights for industry professionals and investors alike. Please check out Impact Capitol and ALFReD for yourself at www.impactcapitoldc.com.