MULTIPLE REAL ESTATE SECTORS POISED TO BENEFIT FROM JULY INFLATION SLOWDOWN

 

Inflation trend may be turning the corner. The headline Consumer Price Index in July was up 8.5 percent compared to a year prior, a deceleration from the 9.1 percent year-over-year jump recorded in June. This slowdown was driven predominantly by a month-over-month decline in energy prices, led by a 7.7 percent drop in the gas price component of the index. The costs of other items, most notably food, continued to rise, however. Setting aside energy and food, core CPI advanced 5.9 percent year-over-year in July, matching the pace set in June but below the 6.4 percent, year-over-year increase reported in March. Stability in the core index paired with a smaller rise in the headline rate suggests that inflation may have peaked, likely a reflection of less impeded supply chains and tightening monetary policy.

Supply chains factor into inflation, and industrial space demand. While the collective 225-basis-point increase in the federal funds rate so far this year is weighing on borrowing activity, it is not the only factor contributing to decelerating inflation. Supply chains are also showing improvement. The transit time between shipping goods from China to the U.S. has declined from a pandemic peak of 83 days to 63. While still above the pre-2020 norm of 48 days, this shift is nevertheless helping supply better meet demand, softening upward pricing pressure. Adapting to these challenges has translated into a robust uptake in industrial space. Absorption has been elevated since mid-2021, driving the national vacancy rate down 120 basis points year-over-year in June to 3.7 percent, its lowest level since at least 2000. Record construction should help stabilize availability this year, with competition by tenants propelling asking rents up by double-digit percentages.

Additional quantitative tightening is still on the docket. While slowing, inflation is still high, which will likely prompt the Federal Reserve to raise the overnight lending rate again in September. Next month the Fed will also double its level of balance sheet reductions to $95 billion in monthly volume. Long-term interest rates, such as the 10-year Treasury, will likely feel upward pressure as a result. The combination of elevated inflation and climbing interest rates will be a challenge for investors, however, the market has already begun to recalibrate. In some cases, prices are being adjusted or buyers are reducing leverage. Investors may also be considering new locations or asset types. Overall, the market is liquid, with investors holding favorable long-term outlooks.

Additional CRE Trends:

Multifamily outlook is largely unfazed. The impact of high inflation and rising interest rates is so far not having a substantial impact on the underlying need for housing. Demand for apartments surged in 2021, with net absorption eclipsing 650,000 units, nearly double the previous peak. That metric has been more tempered in the first half of 2022, due in part to delayed eviction proceedings, as well as limited options for prospective tenants. June’s 3.2 percent national vacancy rate was a three-decade-plus low for that time of year. Tight availability aids rent growth in the near term, while a structural housing shortage also lends strength to the outlook for the next three to seven years.

Lower fuel costs boost hospitality outlook for rest of year. The energy component of CPI, which was up 43.5 percent year-over-year in June, took a notable step down last month, with prices falling across oil, gasoline, and natural gas. This shift bodes especially well for travel. Hotels have already seen increased bookings throughout the year, despite higher fuel costs. June occupancy was just above 70 percent, a pandemic-era first, even with an average daily room rate more than 15 percent above the same point in 2019, which helped compensate for higher costs. The ability to reprice rooms on a daily basis can also appeal to investors concerned about short-term cash flow during elevated inflation.

0.0%	8.5%
Change in CPI from June 2022 to July 2022	Year-over-Year change in CPI as of July 2022

 

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* CPI as of July, 10-year Treasury as of August 10 Sources: Marcus & Millichap Research Services; Bureau of Labor Statistics; CoStar Group, Inc.; RealPage, Inc.; Federal Reserve

  Source: MULTIPLE REAL ESTATE SECTORS POISED TO BENEFIT FROM JULY INFLATION SLOWDOWN

https://www.creconsult.net/market-trends/multiple-real-estate-sectors-poised-to-benefit-from-july-inflation-slowdown/

Five Predictions That Could Revolutionize The Multifamily Housing Industry

 

Look around. If you're a multifamily housing investor, you've seen a steady increase in the number of condos and apartment complexes popping up everywhere. Currently, 35% of the U.S. population is renters, and that figure is rising. However, for owners and operators of multifamily communities, attracting and retaining residents will depend on the ability to integrate amenities and services that meet the expectations of today's (and tomorrow's) increasingly savvy residents. The emergence and adoption of cutting-edge technologies is just the ticket for meeting that challenge.

Here are five predictions that I believe will gain momentum and revolutionize the work and leisure lifestyles for residents as well as optimize investments for owners and operators.

1. Prepare to experience a virtual living space beyond your imagination.

Virtual and augmented reality technologies are reinventing the leasing process for both agents and residents. The savings in time, effort, and costs for leasing agents are substantial. Donning lightweight AR headsets, prospective residents can tour multifamily communities online and enter a virtual world where realistic avatars walk them through floor plans and community amenities.

Digital layouts can allow renters to visualize how their existing furnishings will fit, experiencing how it would feel to actually live there. This virtual staging can eliminate on-site staging and photography costs, reducing the time, staff, and office space needed to maintain property portfolios. Strategic planning and problem-solving for properties can be done directly from the office. VR can be effective for employee training, and AR glasses in the field can enable maintenance staff to collaborate with the central office for issues and repairs. Virtual application possibilities are endless and can enhance the experience for both operators and potential residents.

2. Retire your leather billfold for a crypto wallet.

Cryptocurrencies like Bitcoin are gaining wider understanding, acceptance, and use across many industries. There has been a steady climb in consumer interest and investment, particularly among Millennials.

A form of potential online digital payment for goods and services, crypto relies on blockchain technology that tracks and records each transaction in a decentralized manner through a distributed ledger. Its secure data sharing and strong privacy can eliminate attempts at data manipulation. With tight security, transparent record-keeping, instant transfers, and no government controls or "middleman" fees, cryptocurrency may become an attractive option for multifamily operators as well as residents.

Some forward-thinking multifamily operators are already accepting Bitcoin for rental payments as well as offering Bitcoin rewards for positive resident behaviors and referrals. As Forbes notes: "Blockchain can make MLS property data more centralized and accessible, [with] title records easier to track and transfer." Multifamily operators would be wise to keep a watchful eye on this rising currency movement and consider the many benefits and applications. 3. Kick the traditional parking garage to the curb. Instead of vast underground lots with space(s) designated for every unit, multifamily parking in the future may look quite different. Owners might partner with car share companies for residents to use the services of electric cars only as needed. Dedicated pickup and drop-off zones would allow for the convenient use of autonomous vehicles and rideshare services. Residents with a focus on "green" initiatives already rely on public transportation and walkability factors. Bike storage, rental amenities, and other reward incentives for carless residents should attract rental applicants to properties offering these features. With less dedicated parking, multifamily owners can use the reclaimed space for amenities like halls for community activities or even shared VR rooms. 4. The knock at the door could be your bot buddy. Consumers have developed high expectations for service delivery, and technological innovations are rising to meet these demands. What once seemed like science fiction is fast becoming reality. For example, Amazon has patented blimp warehouses where AI-based drones will fly back and forth to pick up packages and deliver them to drop zones below. By early 2022, Wing—Alphabet's drone service—had already made 200,000 deliveries. In the very near future, multifamily communities could provide myriad drone and bot services to benefit residents and improve the bottom line as they deliver right to your door. With NASA working on urban air mobility maps of metro air spaces, this futuristic image of autonomous drones above and robots below is no longer far-fetched. 5. Net-zero emission designs will bring sunny days for multifamily units. The promise of lower utility bills can be a major incentive in choosing a unit. Multifamily operators are capitalizing on the benefits of cheap, clean, and renewable energy sources. According to the Net Zero Energy Coalition's latest report, multifamily living now accounts for 58% of all net-zero carbon units in the U.S. that are under construction, newly completed, or in the design phase. In California, all new multifamily housing construction must have solar panels for dwellings up to three stories.

Communities sharing solar arrays, energy allocations, and credits will be distributed across multiple user accounts. Common areas converted to solar could save thousands or millions each year, and revenue from the sale of excess energy can lead to a quick ROI and future revenue growth. Most importantly, many residents should be attracted to units with cost-saving amenities and "green" initiatives.

Embrace transformation for the new multifamily paradigm. There's no crystal ball to affirm my predictions, but I'm certain these and other transformative technologies will reshape our work and leisure lifestyles—not to mention the multifamily living experience—in ways we can't even begin to imagine. Multifamily owners and operators should plan now for the future and integrate these trends in some manner over the next three to five years. Those who make the leap should gain a competitive edge. Start building community into your properties while providing the kind of cutting-edge advancements and amenities that residents are seeking. Happy long-term residents (and a healthy bottom line) should be your reward.  

 

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Source: Five Predictions That Could Revolutionize The Multifamily Housing Industry

https://www.creconsult.net/market-trends/five-predictions-that-could-revolutionize-the-multifamily-housing-industry/

Saving vs. Investing: Creating a Healthy Mix

 

Saving and investing are two very different financial strategies. Once you understand the difference between saving and investing, you may do a better job of managing your money. Why? You’ll have a better grasp of when it’s appropriate to save money, when it’s better to invest, and which financial products are right for each goal.

 

What is saving?

Saving essentially means storing your money to use in the fairly near future. You might deposit this money into a bank savings account. 

What are the advantages of putting money into savings?

Saving is a good strategy if you’ll need your money in a short time. You may earn some interest on your balance, but not much.¹

More important reasons to put money into savings might be that you:

• Won’t lose money: In most cases, savings accounts are insured against loss by organizations like the Federal Deposit Insurance Corporation (FDIC).
• Can access your money quickly: When you need your money, you can usually withdraw it without any financial penalty up to a certain number of withdrawals per month, after which you may have to pay a fee.

What are the risks?

Your money may not earn the highest potential yield. In fact, if your savings interest rate doesn’t keep up with the average cost of living, you lose some of your money’s buying power over time.

What financial goals call for saving rather than investing?

Consider putting money into a savings-type account if you need it within in a short time. A typical market cycle is five-to-seven years, so if you need the money in less time than that, it’s a good idea to put it in a savings account. Saving is also a good strategy if you plan to completely fund the goal yourself, and don’t need to rely on your money growing significantly.

Examples of savings goals include:

• Car down payment
• Vacation money
• Down payment for a home, you’ll buy in seven years or less
• Home improvement projects

What financial accounts should you consider for storing savings?

Typical savings options include:

• Bank/credit union savings accounts
• Interest-earning checking accounts
• Money market accounts
• Certificates of Deposit (CDs)
• U.S. Treasury bills and savings bonds

What is investing?

When you invest, you expect to earn money on your investments over time—more than you could earn with a savings account.

Because investments, such as stocks, bonds, and mutual funds, are connected to the financial markets, your account values may go up and down according to changes in the economy.

What are the advantages of putting money into investments?

Investing is often a smart strategy for achieving longer-term financial goals. Because you won’t need your money right away, you can afford for your investments to fluctuate in value. In addition, you can:

• Give your financial goals a head start: Investing may help you earn more money in return than you could just by saving.
• Participate in global financial markets: Even if you don’t own a profitable, global business, you can share in its success. How? By buying a company’s stock or owning a mutual fund that invests in companies.

What are the risks?

Investments may climb in value when financial markets are doing well, the economy is improving, or a company’s profits are growing. However, investments can also lose money when the market declines or a company’s performance slumps. It’s possible to choose low-risk investments. However, they usually earn less over time. 

What financial goals might require investing instead of saving?

Investing can be a good approach when you have longer-term financial goals or need to earn significantly more money than you could by saving it.

Consider investing for:

• Retirement
• College costs
• Down payment for a house, you plan to buy in 10+ years
• Starting a business
• Leaving a financial legacy for your family

What types of financial products or assets are considered investments?

Common investment options include:

• Stocks
• Bonds
• Mutual funds
• Exchange-traded funds (ETFs)
• Real estate
• Real estate investment trusts (REITs)

A healthy mix of saving and investing

Most people benefit from both saving and investing. For instance, you might store money in a savings account for your end-of-year property tax payments or next summer’s vacation. At the same time, you might invest money you’ve earmarked for a future business opportunity and for retirement.

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Source: Saving vs. Investing: Creating a Healthy Mix | Morgan Stanley

https://www.creconsult.net/market-trends/saving-vs-investing-creating-a-healthy-mix-morgan-stanley/

Rents still going up in Naperville but rate increase amount slowing

 

Rents in Naperville continue to increase, though at a slower rate compared to neighboring communities, according to the most recent data from a rental tracker. But the city still has some of the highest rents in the area.

In an August report, ApartmentList.com data shows the median rent in Naperville rose 0.4% between June and July, the first time this year rent growth in the city fell below a half percent.

Naperville’s slowed rate is reflective of a national trend.

Nationwide, rents rose 1.1% over the past month, down from the 1.4% rise between May and June, the report said.

The slowdown signals the market is following its typical seasonal trend, according to ApartmentList, and renters can expect rent growth to continue to cool.

However, there are no signs that prices will actually fall in a meaningful way, meaning that American renters will continue to be burdened by historically high housing costs, according to the report.

Year-to-year growth in Naperville in July was up 9.3% compared to the national average of 12.3% over the last year.

In neighboring Lisle, median rent rose 1.4% in the past month and 11.9% in the past year, while rents increased in Aurora by 0.7% since June and 11.8% since July 2021.

Renters generally find more expensive prices in Naperville compared to other cities in the nation and the Chicago metropolitan area, according to ApartmentList.com.

Naperville’s median two-bedroom rent of $1,984 is above the national average of $1,358 and above the state average of $1,251.

The only rent that was higher in July, according to the report, was in Wheaton, where the median cost of a two-bedroom unit was $2,010.

One-bedroom units in Wheaton were the same as Naperville at $1,572.

In Aurora, the median rent is $209 less than in Naperville for a one-bedroom and $188 less for a two-bedroom, according to data from the report.

To the east, Lisle rents are $117 and $201 lower than Naperville for one- and two-bedroom units, respectively.

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Source: Rents still going up in Naperville but rate increase amount slowing

https://www.creconsult.net/market-trends/rents-still-going-up-in-naperville-but-rate-increase-amount-slowing/

Multifamily Likely to Level Off in H2 As Inflation Heats Up

 

Transactions will still get done but price discovery is likely as buyers and sellers adjust to a new reality.

As economic headwinds mount, the big question on many industry watchers’ lips is whether certain high-flying asset classes will return down to earth.

Continuing rate hikes from the Fed, together with rising inflation and a tense geopolitical picture, have some multifamily investors taking a somewhat more cautious approach to asset acquisitions than since the onset of the pandemic. While vacancy remains about 100 basis points below the norm in most markets, investors and operators see a “more uncertain outlook,” according to analysts from Northmarq.

 

“Inflation is proving to be a persistent challenge, and rising price levels spill over into nearly every segment of the economy, including the rental markets,” the Northmarq report, which takes a look at the multifamily market as of mid-year, states. Inflation had been running below 1.5% toward the end of 2020, but pressures began to mount early last year as the economy began to reopen. Armed in some cases with ample stimulus funds, Americans began shopping, dining out and traveling — and inflation responded in kind. Annual rates of inflation averaged 5.3% from May through September last year, according to Northmarq, before beginning a precipitous climb that saw inflation hit 7% by December.

“The initial thought was that rising prices were transitory, but that view gave way when oil prices spiked following the Russian invasion of Ukraine,” the Northmarq report notes. “Inflation has now reached 40-year highs, with annual rates of increase spiking above 8 percent in each monthly reading since March, before topping 9 percent in June. The trend of rising prices continued at the outset of the second half; CPI was up 8.5 percent year over year as of July.”

 

Following a 75-basis point hike in July — the Fed’s second at that level this year — interest rates remain higher than the levels to which the American consumer has grown accustomed since the Great Financial Crisis. But against that backdrop, the labor market remains strong: unemployment is low, job openings are high, and hiring is clamoring at a rapid clip. And that’s resulted in upward pressure on wages: as of July 2022, average wages had increased by 5.2% year over year.

Northmarq analysts do caution that the labor market is typically viewed as a lagging indicator and note that the pace of hiring appears to be slowing. But while “some industries will likely record layoffs, on the whole, the labor market is forecast to end the year on stable footing,” they say.

Against that backdrop, multifamily fundamentals are still booming — but that trend is likely to stabilize going forward. Take vacancy, for example, the sector saw vacancy tick down 20 basis points to 4.2 percent in the first half of the year, and year over year, vacancy has dropped 60 basis points.  But “while operating conditions are healthy, it is unlikely that the vacancy rate will trend much lower in the coming quarters. More likely, the rate will remain fairly close to current ranges or could creep higher, particularly in markets where the pace of deliveries rebounds after the minimal construction activity in recent years,” Northmarq analysts say.  ”In the near-term, the slowing pace of employment growth should result in a more measured rate of new household formation and absorption of units.”

 

So-called “doubling up,” when renters add roommates, could also drag on absorption this year. Northmarq analysts note that nearly half of all renter households spend more than 30 percent of their incomes on rent, with about one quarter spending more than 50 percent. So “with the economy slowing, and prices rising across the board, some current renters may conclude sharing an apartment unit with a roommate may be the best way to offset rising costs,” the analysts say.

The accelerating pace of construction is also expected to bring supply and demand into greater balance. The development pipeline is predicted to stay high into 2024 at the lease, and projects with more than 750,000 units are currently under construction nationwide, an increase of more than 20% between 2020 and 2021.

From an investor perspective, Northmarq predicts sales velocity will be impacted by rising capital costs and more conservative underwriting, at least for the type of value-add deals that led the way in 2021.

“While activity has picked up in smaller markets, investors continued to target high-growth metro areas when making acquisitions,” the report notes, adding that top markets for sales velocity during the first half of this year included Dallas-Fort Worth, Atlanta, and Phoenix.

Ultimately, “after an extended period of elevated and accelerating transaction volume, the multifamily investment market is expected to level off in the second half of the year,” Northmarq analysts say. “Transactions will still get done, although the investment climate will likely be less competitive than in the past 12-18 months. The most likely scenario is buyers and sellers will undergo a period of price discovery in the coming months, as all parties adjust to the reality of higher borrowing costs and the potential for a slower pace of economic growth.”

Rising interest rates and inflation are already leading some multifamily assets to trade at as much of a 20% discount, said Mory Barak, Co-Founder and Managing Principal of Lion Real Estate Group, which recently announced the closing of its latest multifamily fund.

“The overall health of this sector is very strong, with higher occupancy rates and lower rent volatility than other real asset classes,” Barak said.

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Source: Multifamily Likely to Level Off in H2 As Inflation Heats Up

https://www.creconsult.net/market-trends/multifamily-likely-to-level-off-in-h2-as-inflation-heats-up/

Don't expect home prices to come crashing down soon

What's happening: Home prices were up 18% in June compared to a year ago, with Tampa, Miami, and Dallas reporting the highest annual gains, according to the

S&P CoreLogic Case-Shiller Indices

.

That was a slower pace than in May when they rose 19.9% annually. But the bottom line is that prices are still going up a lot, even as home sales have declined from their peaks.

So are we in a housing bubble?

Economists at the Federal Reserve Bank of Dallas examined this very question earlier this year, noting in a blog post that home prices were rising faster than market forces would indicate they should, and were becoming "unhinged from fundamentals."

That isn't just a big deal for buyers and sellers. The housing market is an important economic indicator and a reflection of how interest rate hikes by the Federal Reserve are playing out.

Watch this space: The market is changing as the Fed's efforts to cap inflation take effect. Climbing mortgage rates are making it more expensive to buy a home. In theory, that should cool demand and prices over time.

And to the extent we are in a bubble, economists think it will slowly deflate rather than suddenly pop. The team at Goldman Sachs predicts that home price growth will slow sharply in the next couple of quarters and eventually flatten out.

"We expect home price growth to stall completely, averaging 0% in 2023," Jan Hatzius, Goldman's chief economist, wrote in a recent research note. "While outright declines in national home prices are possible and appear quite likely for some regions, large declines seem unlikely."

That said: There's a reason prices have shown more resilience. Supply is still constrained.

Pandemic-era shortages have limited the pace of new home building. In the past, downturns in housing have been accompanied by economy-wide recessions, leading to a flood of existing home inventory. Recession leads to unemployment, and cash-strapped homeowners are forced to sell.

Today's labor market is robust, and that influx of housing seems unlikely to happen in this cycle — further prolonging the lack of inventory.

On the radar: Unfortunately, Goldman reports that the slowdown in home price appreciation isn't likely to impact shelter costs, which are a crucial component of the Consumer Price Index tracking inflation.

That's because as higher mortgage rates increase the cost of buying a new home, more people will be inclined to rent, boosting prices in that market.

What job openings data could mean for Fed rate hikes

Companies are hiring, but Americans aren't biting. The latest: The number of open positions in the United States ticked up in July, surprising economists. There were close to two jobs available per job seeker in July, up from 1.8 in June, according to the latest Job Openings and Labor Turnover Survey, or JOLTS, data.

That's not what the Federal Reserve was hoping for. The Fed is worried that

near-record job openings

are helping to drive wage increases, which in turn can prop up inflation, reports my CNN Business colleague Alicia Wallace.

"The Fed will not be happy with this report," Mark Zandi, senior economist for Moody's Analytics, told CNN Business. "It is critical that the job market cools off, and this report suggests that it remained very strong in July." The takeaway: A strong labor market is likely to encourage Federal Reserve officials to continue aggressive interest rate hikes in an attempt to cool the economy. Fed Chair Jerome Powell reiterated his resolve to bring down inflation and to "keep at it until the job is done," last week, even though that plan — which involves a series of hefty interest rate hikes — will bring "some pain to households and businesses."

It's all about oil

US markets tumbled to their third straight day of losses on Tuesday. And while it might be easy to blame Wall Street's bad mood on Fed Chair Jerome Powell, reports my

CNN Business colleague Paul R. La Monica, the most likely culprit is actually falling oil prices. US crude dropped 5.5% to settle at $91.64 a barrel, marking its worst day in five weeks.

The drop is good news for consumers. It could mean that prices at the pump keep falling and that a key measure of inflation — energy prices — continues to recede.

On the radar: The national average for a gallon of regular gasoline hit $3.84 on Wednesday, according to AAA. That's down from $4.22 one month ago.

But what's good for consumers isn't always good for markets. The drop in oil prices led to a big sell-off in energy stocks. Shares of Chevron (CVX) fell more than 2%. The S&P 500 (INX) was down 1.1%, and oil stocks were the biggest losers. The S&P Energy Select Sector SPDR Fund slid 3.4%.

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Source: Don’t expect home prices to come crashing down soon

https://www.creconsult.net/market-trends/dont-expect-home-prices-to-come-crashing-down-soon/

Housing Market Outlook: Builders Could Stop Construction Due to Expense Falling Demand

 

• Despite falling demand from homebuyers, experts have maintained that the US real estate market is healthy.
• But recent data on homebuilding highlights a dark storyline brewing.
• Builders are feeling the pain of tanking demand and are slowing down new construction, fueling a vicious cycle.

For months economists and housing experts have maintained that the US housing market is in relatively good standing despite a decline in affordability and buyer demand.

While it's not the foreclosure crisis of 2008, today's real estate market also has a dark side.

It all stems from the fact that fewer and fewer Americans can afford to buy the limited homes available, especially as interest rates rise. Homebuilders are feeling the pain of tanking demand and are slowing down housing construction — contributing to the housing crisis vicious cycle.

Peter Schiff, the chief economist at investment company Euro Pacific, told his more than 800,000 Twitter followers that soon "new home construction will almost completely shut down."

"That's because it will be too expensive to build new homes that most buyers can actually afford," he said in a tweet. "The housing market will consist almost exclusively of existing homes that will sell for less than the cost to replace them." Although dramatic, Schiff's pessimistic tweet may foreshadow what's to come in the real estate market.

In July, residential housing construction plummeted 9.6% to an annualized rate of 1.4 million units, according to the Census Bureau. The decline marked the slowest rate of home construction since February 2021 and highlights how rising costs are leading to less affordable housing options for Americans.

"Affordability is the greatest challenge facing the housing market," Robert Dietz, the chief economist at the National Association of Homebuilders said in a housing report. "Significant segments of the home buying population are priced out of the market."

Indeed, higher housing costs have dampened affordability for many Americans. Data from the US Census Bureau shows that an increasing number of people are falling behind on their rents.

Americans have a volatile economy to blame for surging housing prices. Inflation and interest rate hikes have increased the costs of everything from construction to mortgage lending. It has made it harder for builders to construct more low-cost homes and as a result, buyers' ability to afford home purchases. This has led to increased rental demand and ultimately higher rents across the nation — it has also created a downturn in the US real estate market.

With fewer people competing for homes, the real estate market is losing steam. In July, nationwide new home sales fell to a six-year low, declining to just 511,000 units. During the month, existing home sales — a measure of sales volume and prices of existing housing inventory — declined for the sixth consecutive month, falling to a two-year low as only 4.81 million units were sold.

In August, Diane Yentel, the president and CEO of the National Low Income Housing Coalition, testified in front of the US Senate Banking committee that the nation's housing ecosystem has taken a turn for the worse.

"Pre-pandemic millions of extremely low-income households — disproportionately people of color — struggled to remain housed and more than half a million people experienced homelessness," she said. "Now as resources are depleted and protections expire, low-income renters are faced with rising inflation, skyrocketing rents, and eviction filing rates are reaching or surpassing pre-pandemic averages."

As emerging data points to a possibility of a housing recession, Yentel is not alone in her concerns — more economists are giving warnings.

"The whole housing sector is now in retreat," Ian Shepherdson, the chief economist at Pantheon Macro, "told Forbes, adding that housing construction will likely continue falling until early 2023 — and that could mean the US housing affordability crisis is just getting started.

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Source: Housing Market Outlook: Builders Could Stop Construction Due to Expense Falling Demand

https://www.creconsult.net/market-trends/housing-market-outlook-builders-could-stop-construction-due-to-expense-falling-demand/