Excerpt from the 4Q18 Witten Advisory: The “double-barreled blitz” of rising mortgage rates and solid increases in home prices should result in waning homeowner affordability. Home appreciation reached nearly 6% over the past year, while mortgage rates rose by 60 bps, pushing principal and interest payments up almost 14%. Double-digit P&I increases should continue through…
DetailsExcerpt from the 4Q18 Witten Advisory: As the headline in the chart points out, for the first time in three years, absorption exceeded net completions. With so many new projects in lease-up, it’s not surprising that leasing surged, hitting 260,000 units – the highest level since late 2010. What is surprising is that demand soared…
DetailsExcerpt from the 3Q18 Witten Advisory: Even with lots of new product, Orlando led the nation in rent growth, with occupancy far above its long-term average…i.e., unusually little vacancy in the existing market. On the other hand, Austin and Nashville had great demand but very little pricing power. The top 10 list on the left…
DetailsExcerpt from the 3Q18 Witten Advisory: The chart above presents the growth in 20- to 34-year-olds across the 43 major markets. Although this data was just released recently, it actually covers the period from mid-2016 to mid-2017. The green columns show the magnitude of young adult gains in each market, with Dallas ranking #1 with…
DetailsExcerpt from the 2Q18 Witten Advisory: The charts on the right illustrate how different the customers are for single-family rentals and apartments. Renters who choose multifamily are typically younger and have small households (probably living alone), while single-family renter households are most likely to have at least three persons and tend to be middle-aged. In…
DetailsExcerpt from the 2Q18 Witten Advisory: The federal government has certainly launched policies that have helped lift economic growth, not just the new tax law but also reducing regulation across industries. The economy’s strength has also led the Fed to raise short-term rates, and one key reason that the Fed is more confident about raising…
DetailsExcerpt from the 2Q18 Witten Advisory: This supply/demand scatterplot shows most markets clustered near the green dashed line where demand growth (on the horizontal axis) matches supply growth (on the vertical). With new deliveries having ramped up in most markets, we’re now at the stage of the cycle where completions are running slightly ahead of…
DetailsExcerpt from the 1Q18 Witten Advisory: The above chart highlights that new supply growth rates are down in most markets, albeit by a narrow majority. With starts through February, Charlotte outpaces all markets with new inventory growth of 5.5% – up sharply from a year ago. Similar ramp-ups also occurred in Austin, Portland and Nashville, though…
DetailsExcerpt from the 1Q18 Witten Advisory: There are a number of reasons not to be concerned about mass moveouts from the apartment market to homeownership. Some of the obstacles to buying a home are highlighted in the above charts. Even for renters who want to purchase a house, the options are very limited. The upper…
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