Key Market Takeaways
Rent Increase Caps
* President Biden proposed national rent control to cap annual rent increases at 5% for landlords with over 50 units, threatening the loss of federal tax write-offs for non-compliance.
* The initiative aims to address high housing costs and improve Biden's voter support but faces challenges in a GOP-controlled Congress and a closely divided Senate.
* Exemptions include new constructions and substantially renovated units.
* Industry leaders criticize the proposal as ineffective, while advocates like the National Low Income Housing Coalition view it as a crucial step against corporate rent gouging.
* The White House fact sheet highlights:
1. Legislation to cap rent increases or risk losing federal tax breaks.
2. Repurposing public land for 15,000 additional affordable housing units in Nevada.
3. Rehabilitating distressed housing and revitalizing neighborhoods, including in Las Vegas.
Single-Family Rentals
* For the fifth straight quarter, SFR operating costs met or exceeded the growth in rental rates, according to the NRHC’s Single-Family Rental Market Index.
* Rising operating costs are challenging providers, with increases in all aspects of the business.
* CoreLogic reports a 3% increase in single-family rental gains in April from a year ago, while attached properties saw a 0.5% decline.
* St. Louis led annual rent growth at 6.3%.
* Zillow data shows a 39.6% increase in single-family rents since March 2020, with a 4.7% rise in June compared to last year.
* ATTOM Data Solutions projects an average annual three-bedroom gross rental yield of 7.55% in 2024, driven by rents rising faster than home prices.
Inflation Data
* The NAHB reports an overall cooling of consumer prices in June, with gasoline prices declining but shelter costs increasing.
* Federal Reserve data suggests a potential interest-rate cut in September, with consumer prices showing a slight decline.
* Despite a slowdown, shelter costs continue to exert upward pressure on inflation, rising by 5.2% from a year ago.
* The Federal Reserve is cautious about waiting too long to cut rates, noting ongoing effects from current tightening measures.
Real Estate Investors
* Investor activity accounted for 14.8% of home purchases in Q1 2024, the highest level ever seen.
* Smaller investors made up 62.6% of purchases, while larger investors pulled back amidst higher rates.
* The Home Purchase Sentiment Index (HPSI) rose to 72.6 in June, with increased optimism about home buying and selling.
* Redfin reports a significant drop in apartment construction, with developers obtaining permits for fewer multifamily units due to high borrowing costs and an influx of new units.
* Zillow highlights a resurgence in rent growth, with annual rental price increases at their fastest pace in nearly a year.
* Lower rates and rising supply could provide more options for property acquisition in the coming months, increasing purchasing power for buyers.
This data has been curated from multiple different sources. The goal is by reading these updates you can keep up with what is happening in the market.
