Contents
Home Sales and Purchase Financing
Prices
- John Burns Real Estate Consulting assisted Fortune Magazine to identify the markets with the steepest declines in home prices.
- All of the 24 markets experiencing a decline by December 2022 of 5% or more were in the West, except Austin (TX).
- Of these, 14 were in California.
- Redfin calculates that the median selling price of single-family homes has fallen 11% since the mid-summer 2022 peak.
Sales Volume
- Home buyers responded to a substantial dip in mortgage rates in late January and early February, according to Realtor.com.
- Purchase mortgage applications rose 45.6% in January.
- New home sales rose 53% from December to January compared to a normal jump of 24% after the holidays.
- Investor home purchases slid by 45.8% in 2022 Q4 from 2021 Q4, reports Redfin, the largest year-over-year decline ever but a decline from the near record pace of 2021 Q4.
- The 2008 downturn saw investors cut purchases by 45.1%.
- In some of the biggest markets (e.g., Las Vegas, Charlotte, Nashville, and Phoenix), investor purchases plummeted by 60%.
- From the 3rd quarter to the 4th quarter of 2022, investor purchases dropped 27%, another record (excluding the early days of the Covid-19 pandemic.
- Despite the steep slowdown in purchases by investors, their share of all purchases in some markets remained significant, such as Charlotte (22.4%).
- In 2022 Q4, investors ramped up their focus on starter homes (less than 1,400 square fee), making those homes 39.5% of all investor purchases.
Multi-Family and Single-Family Rentals
Rents
- Yardi Matrix released its National Multifamily Report, (paywall) which showed no change in rents from December after a $4 and $9 decline in the two prior months.
- Year-over-year, rent rose 5.5% down from 6.2% in December.
- Two North Carolina cities beat the national average — Raleigh (6.9%) and Charlotte (6.8%).
- The Arbor Realty 2022 Q4 Single-Family Rental Investment Trends Report sheds light on the SFR market in particular.
- Build-to-rent was 6.3% of new single-family construction in the 4th quarter of 2022.
- Rent growth on new leases declined significantly in the same period.
- New collateralized mortgage-backed securities issuances in 2022 totaled $11.2 billion, but less than $1.0 billion in Q4.
- Term / rate refinancing fell to 11.2% of all SFR refinancing in 2022.
- The SFR occupancy rate averaged 94.6% in Q4 2022 according to the U.S. Census Bureau and a slightly lower 94.1% in the DBRS Morningstar data.
- Vacant-to-occupied rent increases dropped by half in late 2022 from the above 10% average from early 2021 to October 2022.
- Renewal rent growth has declined modestly but much less so than new tenant rent.
- SFR cap rates ended 2022 at approximately the same level as the first quarter at about 5.6%.
- CoreLogic, which focuses on single-family rental data, reported rental price growth of 6.4% in December 2022 compared to December 2021, down from 12.1% for the 2020 to 2021 year.
- Orlando posted the highest growth in SFR rent at 10.8%.
Absorption
- As year-end 2022 rental data rolled in, Real Page offered a summary of absorption rates in multi-family.
- The Yardi Matrix report cited above counted 269,000 multi-family units absorbed in 2022 out of 400,000 delivered.
U.S. General Economic Data
- The U.S. Bureau of Labor Statistics reported that real wages declined in the year from January 2022 to January 2023. With brief exceptions, real wages have been heading downward for almost two years.