The amount of equity in mortgaged real estate increased by $1.9 trillion in Q1 2021, an annual increase of 19.6%, according to the lastest CoreLogic Homeowner Equity Report . The average annual gain in equity was $33,400 per borrower — the largest average equity gain in at least 10 years. The nationwide negative equity share for Q1 2021 was 2.6% of all homes with a mortgage, the lowest share of homes with negative equity since CoreLogic started tracking this number in the third quarter of 2009.
As we approach the midpoint of the year, it’s worth examining how commercial real estate markets are faring in comparison with the year of Covid’s eruption and prior years. RCA’s tracking of global commercial real estate sales shows all three global zones — the Americas, Asia Pacific, and Europe, the Middle East and Africa (EMEA) — remain deeply impacted. Volumes observed now across all zones globally are lower than both 2020 and the average of 2017-19 activity, but the severity of the drop varies across the world.
In March 2021, 4.9% of home mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure), a sharp decrease from February 2021 according to the latest CoreLogic Loan Performance Insights Report. The 0.8 percentage point decrease in the delinquency rate from February was the largest since the start of the pandemic and could be partly attributed to the largest one-month increase in employment since August 2020.
The last decade significantly shifted the urban geography of the United States. The longest economic expansion on record brought new opportunities and challenges, then came to a screeching pandemic halt in 2020. The growth was long-lived but uneven. New and existing innovation hubs and oil towns boomed, while some markets struggled to shake off sluggishness after the Great Recession. Throughout the 2010s, America’s housing growth both reflected and reinforced these trends.
U.S. apartment rents and occupancy are climbing rapidly in 2021, and May’s performance results show a continuing acceleration of momentum. Effective asking rents for new leases jumped 1.7% during the month, taking annual change to 4.2%. The last time annual rent growth topped 4% was in the middle of 2016. It now wouldn’t be surprising if rent increases this year surpass the last economic cycle’s peak annual growth of 5.4% seen in 2015.
Cross-border commercial property investment by Chinese firms has been on the wane since China’s government implemented curbs on capital outflows in 2017, and there’s no indication that these capital controls are going to be lifted any time soon. The charts below show just how significant the impact on overseas investment has been. Between 2015 and 2017, mainland Chinese investors deployed just over $91 billion into income-producing commercial real estate globally.
ATTOM Data Solutions, curator of the nation’s premier property database, today released its first-quarter 2021 U.S. Residential Property Mortgage Origination Report, which shows that 3.77 million mortgages secured by residential property (1 to 4 units) were originated in the first quarter of 2021 in the United States. That figure was up 3 percent from the previous quarter and 71 percent from the first quarter of 2020 – to the highest level in more than 14 years.
Office investment across Europe has plummeted since the onset of the Covid-19 pandemic. Transaction volume fell by almost one-half in the year through March compared with the prior 12 months, and the number of traded assets fell to the lowest level since 2011. Moreover, the continent’s biggest institutions are pivoting away from the office as they embrace residential and industrial. In Europe during 2020, institutional players deployed 40% of their capital on offices – the lowest ever proportion for a calendar year.
National home prices increased 13% year over year in April 2021, according to the latest CoreLogic Home Price Index (HPI®) Report. The April 2021 HPI gain was up from the April 2020 gain of 4.6% and was the highest year-over-year gain since February 2006. Low mortgage rates and low for-sale inventory drove the increase in home prices. While a pick-up in construction and an increase in for-sale listings as more homeowners get vaccinated may help moderate surging home price growth, affordability challenges may drive some potential home buyers out of the market which could reduce demand.
Months into 2021, housing supply remains at historically low levels while the impact from the pandemic and low mortgage interest rates linger. This has meant that some potential sellers are still holding on to their properties in fear of the virus while homebuyers are flooding the market, trying to capture the benefits of low mortgage interest rates. Together, these have shrunk the already small supply of available homes.
The headline rate of U.S. property price growth accelerated in April as the industrial, apartment, retail and office indices all posted positive annual returns for the first time since the pandemic began, the latest _RCA CPPI: US_ summary report shows. The U.S. National All-Property Index grew 8.4% in April over the last year. The laggard in April was the CBD office index.
Welcome to the June Apartment List National Rent Report. Our national index increased by 2.3 percent from April to May, representing the third straight month of record-setting rent growth, going back to the start of our rent estimates in 2017. After this recent spike, year-over-year rent growth now stands at 5.4 percent nationally, and prices are now in line with where we expect they would have been if the pandemic-related rent declines of 2020 never occurred.
The increase in U.S. commercial real estate investment in April might suggest that the market is through the worst effects of the Covid-19 pandemic. Still, while there were high double-digit annual growth rates in commercial property sales for the month, all the problems from the pandemic are not yet in the rearview mirror. The good news is that deal activity is climbing. Commercial property sales were up 66% from a year earlier in April.
Relative to other European markets, the Danish market has boomed through the pandemic. Transaction volume increased 44% year-over-year in the 12 months through Q1 2021, and at a shade under €8.4 billion ($10.2 billion) eclipsed the market’s annual record high for transactions of 2017. Moreover, first quarter deals topped €3.5 billion, which makes the start of 2021 one of the best three-month periods for the market on record, catapulting the market to become the fourth most active in Europe at the start of the year.
Lack of availability of homes for sale has been the Achilles’ heel of many housing markets across the country even prior to 2020, and the COVID-19 pandemic has only exacerbated the shortfall. Since the Great Recession, the inventory of homes for sale has been on a decline and has reached its lowest recorded levels in recent months. From the 1980s to early 2000s, the annual number of homes for sale averaged 1.9 million. In 2020, the number fell below 1 million.
The rise of remote work over the past year has allowed many office workers to relocate, and a specific type of apartment market seems to have benefited from this change: beach towns. Among the core 150 markets tracked by RealPage, the list of areas with the most significant growth in occupied apartment units between April 2020 and April 2021 reads like a list of vacation hot spots.
All five of the major Texas apartment markets ranked among the nation’s worst occupancy performers in April – but it’s not as bad as it sounds. While Texas markets have a reputation for having lots of apartment demand, it’s typical for occupancy in the big five – Houston, Dallas, Austin, San Antonio and Fort Worth – to run behind the national average.
Three important factors in mortgage underwriting are debt-to-income (DTI) ratios, loan-to-value (LTV) ratios and credit scores. Over the course of the pandemic, we have seen a decrease in the average DTI and LTV as well as an increase in the average credit score of loan applicants. There are two possible reasons for this change: either the risk attributes of applicants have changed, or lenders’ credit underwriting standards have changed due to an uncertain economic outlook.
Student housing operators must have breathed a collective sigh of relief in April. Or maybe they were just out of breath from processing all the signed leases that came through that month. Either way, they’re finding that the pace finally picked up after months of lethargy that came as students dropped their signing pens and sat on their hands until university administrators provided some clarity around their campus’ COVID-19 plans.