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Home Buyers’ Ideal Community, Mapped: Europe’s GDP Per Capita

Plus, How the Location of America’s Moms Impacts Home Buying Decisions and 5 more Real Estate Insights

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A Quote

“The three big ones in life are wealth, health, and happiness. We pursue them in that order, but their importance is reverse.”

― The Almanack of Naval Ravikant

Latest Rates

Mortgage Type

Current Rate

1 Day Change

1 Week Change

1 Mon Change

1 Year Change

52 week Low

52 week High

30 Yr. Fixed

7.25%

-0.03%

-0.18%

+0.24%

+0.75%

6.49%

8.03%

15 Yr. Fixed

6.68%

-0.07%

-0.17%

+0.23%

+0.74%

5.90%

7.35%

30 Yr. FHA

6.64%

-0.06%

-0.28%

+0.19%

+0.49%

6.00%

7.44%

30 Yr. Jumbo

7.45%

-0.03%

-0.18%

+0.13%

+1.18%

6.34%

8.09%

7/6 SOFR ARM

7.32%

-0.03%

-0.18%

+0.57%

+0.59%

6.11%

7.55%

30 Yr. VA

6.65%

-0.07%

-0.28%

+0.19%

+0.47%

6.02%

7.46%

Macro Trends

U.S. Job Gains Dip to Six-Month Low in April link

  • U.S. job growth slowed in April 2024, adding only 175,000 jobs, the smallest monthly gain since October 2023. This was significantly below the expected range of 235,000 to 240,000, indicating a cooling labor market potentially influenced by high interest rates and inflation.

  • April marked the 40th consecutive month of job additions, though the total was 22,000 jobs lower than previously reported after revisions. Despite the slower pace, the U.S. has maintained a robust period of employment expansion, one of the longest since 1939.

  • The unemployment rate increased slightly to 3.9%, the highest since February 2022. This rise occurred despite the labor force participation rate holding steady at 62.7%, suggesting some underlying shifts in the employment landscape.

Real Estate Trends

Home Price Signals Point to Flat Growth link

  • Inventory levels are rising steadily, not sharply. As of May 2024, there are nearly 600,000 single-family homes on the market, marking a 33% increase from last year, and inventory is expected to surpass 2020 levels by July. The growth, influenced by high mortgage rates, is gradual and consistent, contrasting with the rapid increases seen two years ago.

  • New listings and sales are showing a cautious recovery. While new listings have slightly decreased this week to 71,000, they are still 21% higher than last year, indicating a gradual return of sellers to the market. Sales are modestly increasing, with 78,000 new contracts pending, showing a promising, albeit slow, upward trend in market activity.

  • Home prices are stable but poised for minimal growth. The median price of homes with contracts pending hovers just below $400,000, suggesting a potential rise soon. However, significant price gains are unlikely this year, with current trends indicating very limited upward movement in prices throughout the spring season.

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Increased Supply Continues to Drive Up Industrial Vacancy Rate link

  • The industrial real estate market faces a significant supply/demand imbalance for the eighth consecutive quarter. Net absorption has decreased, now representing only about a quarter of the more than 100 million square feet completed in Q1 construction.

  • Sublease availability surged by 9.8% quarter-over-quarter to 195.1 million square feet, the highest total recorded by CBRE. This rise in sublease options is a clear indicator of shifting dynamics in the industrial real estate market.

  • The construction boom has led to higher vacancy rates, now up by 180 basis points year-over-year to 5.3%. Construction completions in Q1 totaled 125.1 million square feet, with over half remaining vacant, suggesting a potential overestimation of demand.

Demand for riskier adjustable-rate mortgages hits highest level of the year, due to rising rates link

  • As mortgage rates increase, adjustable-rate mortgages (ARMs) are more attractive due to their initially lower rates. The share of ARM applications jumped to 7.8% of total mortgage demand, the highest for the year.

  • Mortgage rates are expected to remain high due to persistent inflation, affecting housing affordability and the mortgage market. The 30-year fixed mortgage rate recently climbed to 7.29%, the highest since November 2023.

  • Home purchasing and refinancing activities are declining as mortgage rates rise. Homebuyer applications are down 14% from last year, and refinancing has dropped by 3% from last week, with few incentives for homeowners to refinance at current rates.

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Something I found Interesting

The Mom Factor: How the Location of America’s Moms Impacts Home Buying Decisions link

  • Proximity to moms is a major factor in home buying decisions. Three-quarters of Americans prefer to live near their mothers, influencing real estate choices significantly.

  • Relocation for family closeness is common; 47% of adults have moved or plan to move to be nearer to their mothers. This includes buying or renting new homes specifically to achieve this proximity.

  • Financial implications are pivotal in these decisions. With ongoing rental declines, cohabiting with moms or arranging nearby living setups is becoming an attractive, economical option for many.

Location Specific

Inventory Growth Sizable Among Carolinas Markets link

Image

  • The Carolinas have shown significant apartment inventory growth compared to the national average. Wilmington, NC, notably increased by about 30% since 2019, making it one of the highest in the nation.

  • Major markets like Charleston, Charlotte, and Raleigh/Durham have seen growth rates of 15% to 25% over five years. This growth is driven by substantial population increases and robust demand for apartment living.

  • The Carolinas outperform most large apartment markets in the U.S., with only Huntsville, AL and Boise City, ID showing similar growth.

One Chart

Home Buyers’ Ideal Community

Image

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Off Topic

Mapped: Europe’s GDP Per Capita, by Country

Image

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Cheers,

Vidit

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