November Market Insights

Homebuyer Sentiment Hits a Historic Low
Key Insight: 84% of Americans believe it’s a "bad time to buy" a home.

• This level of pessimism surpasses notable downturns like the early 1980s and the Great Recession.

• Economic pressures, high mortgage rates, and stagnant wages contribute to the bleak outlook.

Impact on Real Estate:
Negative sentiment could drive more renters into multifamily properties, bolstering the demand for rental units in the short term.

Decline in Multifamily Housing Starts
Key Insight: Multifamily starts are projected to drop by 74% by mid-2025.

• After peaking at 150,000 units in late 2022, starts are trending toward just 40,000 units.

• The wave of apartment completions from 2021–2023 has led to higher vacancies and reduced pricing power.

Future Implications:
This reduction in new supply could lead to a housing shortage within 12–24 months, stabilizing rent prices and occupancy rates.

Birthrate Decline and Long-Term Demand
Key Insight: U.S. birthrates are at historic lows, posing potential challenges for long-term housing demand.

• Fertility rates have steadily declined since the late 1950s, reflecting slower population growth.

• Reduced younger generation sizes could eventually temper housing demand, especially for larger units.

Industry Consideration:
Immigration trends and housing policies will play critical roles in mitigating this trend's impact.

Conclusion
While challenges persist, these market shifts also bring opportunities. With fewer new developments and rising rental demand, this may be an opportune moment to optimize your portfolio and focus on long-term gains.

Have a wonderful holiday season!