The CoreLogic Loan Performance Insights report features an interactive view of our mortgage performance analysis through June 2021. Measuring early-stage delinquency rates is important for analyzing the health of the mortgage market. To more comprehensively monitor mortgage performance, CoreLogic examines all stages of delinquency as well as transition rates that indicate the percent of mortgages moving from one stage of delinquency to the next.
The nation’s overall delinquency rate was 4.4% in June. The serious delinquency rate fell to its lowest level since May 2020. In June 2021, 4.4% of home mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure), which was a 2.7-percentage point decrease from June 2020 according to the latest CoreLogic Loan Performance Insights Report . However, overall delinquencies were still above the early 2020 pre-pandemic rate of 3.6%.
ATTOM’s newly released Q3 2021 Vacant Property and Zombie Foreclosure Report found that 1.3 million residential properties in the U.S. sit vacant, representing 1.4 percent, or one in 74 homes, across the nation. According to ATTOM’s latest vacant properties analysis, while the number of properties in the process of foreclosure in Q3 2021, is down 3.7 percent from Q2 2021 and down 0.2 percent from Q3 2020, among those pre-foreclosure properties, the number of those sitting vacant in Q3 2021 is down quarterly by 6.7 percent and annually by 5.3 percent.
Apartment retention rates are soaring back to lockdown-era highs, as more renters are determining that staying in place is often the best and most affordable option – given a remarkable lack of alternatives for all types of housing and for all price points. The share of renters choosing to renew expiring leases in August 2021 surged 4 percentage points year-over-year, the largest increase on record. That brought the overall retention rate to 57.2%, just shy of the historical peaks set during the height of the lockdowns in April and May 2020.
The Dodge Momentum Index dropped 3% in August to 148.7 (2000=100) from the revised July reading of 154.0. The Momentum Index, issued by Dodge Data & Analytics, is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. The commercial planning component lost 2% in August, while the institutional component fell by 6%.
The inflation statistics this summer have captured headlines. Economic policy mavens often look at a price index excluding food and energy, referred to as the core price index, which tends to be more stable over time and a less noisy barometer of underlying inflationary trends. Newsworthy was the spike in core inflation: the Consumer Price Index, or CPI, measured a jump in core inflation to 4.5% in June, the highest in 30 years. Rent comprises 40% of the core CPI price index. Tenant rent and housing characteristics are used to impute an “equivalent” rent for owner-occupied homes in the index.
National home prices increased 18% year over year in July 2021, according to the latest CoreLogic Home Price Index (HPI®) Report . The July 2021 HPI gain was up from the July 2020 gain of 5.3% and was the highest 12-month growth in the U.S. index since the series began in 1976. The increase in home prices was fueled by low mortgage rates, low for-sale supply and a rebounding economy. Projected increases in for-sale supply and moderation in demand as prices grow out of reach for some buyers could slow home price gains over the next 12 months.
The CoreLogic Home Price Insights report features an interactive view of our Home Price Index product with analysis through July 2021 with forecasts from July 2022. Home prices nationwide, including distressed sales, increased year over year by 18% in July 2021 compared with July 2020 and increased month over month by 1.8% in July 2021 compared with June 2021 (revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results).
August brought yet another set of new records for U.S. apartment rent growth and occupancy. Effective asking prices for new renters jumped 1.8% just in the month of August, driving asking prices up 10.3% year-over-year. The country’s average monthly rent for new residents just moving in reached $1,582. Rents also are up significantly for those staying in place when initial leases expire, but the pace of price growth is slower than for those moving from one property to another. Those signing renewal leases in August experienced price increases averaging 5.2%.
Apartment demand in Texas markets has been exceptional, but so has construction of new units, resulting in stubbornly limited occupancy, despite all the leasing activity. Apartment demand has been solid across the Lone Star State, with three of the big five Texas markets ranking among the nation’s best absorption performers in the year-ending 2nd quarter. But these markets have been on developer’s radars for a while now, and have delivered new units as fast as renters could rent them.
As we predicted last month, the decrease in annual building permit levels in June foretold a decrease in annual starts in July. U.S. housing starts decreased by 7% to 1.534 million units in July after a 5.3% decrease in building permits the month before according to the U.S. Census Bureau. The seasonally adjusted annual rate for total residential building permits in July was at 1.635 million units, up moderately (+2.6%) compared to June, so look for starts to tick back up next month.
Manufactured housing represents a small share of the U.S. commercial real estate market, at approximately 1% of total deal volume, but activity in this alternative sector is gaining momentum. Sales of individual properties reached the highest levels yet in the second quarter. Acquisitions in the four quarters through Q2 2021 totaled $4.1 billion, up 48% compared with the prior four quarters and 30% above the average seen since 2017.
Welcome to the September Apartment List National Rent Report. Our national index increased by 2.1 percent from July to August, a slight cool-down from 2.5 percent the month before, but nevertheless a continuation of rent growth that has persisted since the start of the year. Since January 2021, the national median rent has increased by a staggering 13.8 percent. To put that in context, rent growth from January to August averaged just 3.6 percent in the pre-pandemic years from 2017-2019.
Investor activity in real estate markets during the COVID-19 pandemic has mirrored the market as a whole. Investor purchases reached their lowest point in May 2020 with a year-over-year decline of 36%. Since then, they’ve still only recovered with a year-over-year increase of 12% in December of last year. Given the all-encompassing nature of the COVID-19 recession, this should not be surprising. Even though investor purchases are up, their market share is down.
U.S. commercial real estate sales climbed in July and the rate of price growth accelerated as most but not all property sectors advanced past the pandemic recovery phase. Deal volume for the month rose 74% from a year ago and was above the average pace set across each July since 2005. The apartment sector was the lead destination for capital in July, constituting 35% of total commercial real estate investment, the latest edition of _US Capital Trends_ shows.
With the nation’s occupancy tightening to record levels – an incredible 96.9% as of July 2021 – many of the nation’s markets are seeing subsequently strong rent change. Overall, the nation’s annual effective asking rent change as of July landed at 8.3%, the biggest increase since at least 2010. As 2021 progresses, apartment operators are shifting their focus towards budgeting for 2022. As one might expect, there have been a lot of questions about 2021’s strength and whether that momentum could carry into 2022.
Consumer confidence has risen to its highest levels since the onset of the pandemic. But while many consumers are planning to buy homes, cars, and major appliances, there are still about 2 million homeowners behind on their mortgage payments and/or in forbearance programs. Fortunately, a multitude of loss mitigation waterfalls, many forbearance safeguards and an abundance of home equity have given those borrowers an opportunity to keep their homes when the foreclosure crisis finally sunsets.
While the U.S. apartment market as a whole is posting record-setting occupancy and rent growth, performances generally remain just lukewarm in high-rise properties. There’s certainly improvement in the stats for high-rise projects viewed relative to what was seen in the 2020 to early 2021 slump, but the results for towers are trailing the achievements realized in mid-rise and garden properties across several key measures of performance.
Australia’s industrial sector is going through an extended purple patch, so it comes as little surprise that yields are trending down across all price brackets. Still, the more significant industrial deals have seen yields compress more so than the smaller end of the market, as investors appear willing to splash out to secure a premium offering. Yields on transactions in excess of A$100 million are now trading at an average of 4.8%, down from 6.3% just two years ago.
In a year when people have yearned for a return to normal, the rental market has been anything but. Not only are rent prices rising, they are rising tremendously fast and rising virtually everywhere. According to our national rent estimates, prices jumped over 11 percent in the first half of 2021, more than doubling the rate of inflation and more than tripling the typical rent growth we measured in the several years preceding the pandemic. Today, 87 of the nation’s 100 largest cities have fully rebounded to pre-pandemic rent prices