Rental growth
Some experts are questioning if the recent surge in rental growth is an indicator of tightening rental markets. In March, rental growth increased to 3.7% from last year, a 12-month high, according to the latest Consumer Price Index. According to a new report from Capital Economics, analysts are optimistic about the rental market’s outlook but were surprised at the boost in growth. So, what’s behind this acceleration and will it continue? Capital Economics said it suspects the recent rise in earnings growth may be the cause.
Zero down mortgages
Zero down payment loans are back, but this time for real estate investors only. Hard Money Sources announced that real estate investors can get a loan to cover the entire value of their investment. The zero down payment hard money loan is actually a combination of two loans. The first loan is a personal loan based on the borrower’s individual creditworthiness and covers the down payment itself. The second loan is a traditional hard money loan that is backed by equity of the property being financed.
Multifamily spaces in dying malls
As major anchor retailers at malls continue to shut their doors — Macy’s, J.C. Penney, Sears — those properties are finding a common ground to repurpose the space. A popular solution favors converting retail space into multifamily, mixed-use developments. And it’s finding big backers with even bigger pockets, as three deals emerged in one recent week alone! For example, Merlone Geier Partners unveiled its updated plan for the former Laguna Hills Mall during a recent Town Hall. Two anchor stores going vacant last year freed up more areas for development.
Home remodeling
Home remodeling activity is expected to cool down considerably in 2020 as the economy slows. Gains on home improvement and repair spending are projected to continue to decline through early next year, according to the latest from the Joint Center for Housing Studies of Harvard University. The center’s Leading Indicator of Remodeling Activity index predicts homeowner remodeling spending will fall from 7% to 2.6% in the first quarter of 2020. This is well below the historical average of 5%, the report points out, and a low the market hasn’t seen since 2013.
The economy
As the housing market continued its recovery over the last several years, home prices have risen. But after a five-year run, it appears things are cooling off – and fast. It’s a strong sign that the economy is slowing down, just as many analysts have predicted. But the quick change of pace may mean that it’s slowing faster than expected. Homeowners and investors are pulling back on their housing-related spending. According to a recent report by BuildFax, single-family housing authorizations are down a full 8.4% from last year.
Multifamily HMDA data
Multifamily lenders are required by the Home Mortgage Disclosures Act to report data to regulators on the number of units in a property. But the Consumer Financial Protection Bureau discloses only vague ranges of unit totals and income-restriction units. The Urban Institute said the vague reporting of HDMA data is a roadblock that prevents analysts from understanding how well a lender is serving its community. The problem is particularly poignant in multifamily lending as its lenders are more concentrated in individual communities.
