News by Topic : Macroeconomic fundamentals

  • 6/22/2015

    REITs, Real Estate and Recession Risks: Where Are We in the Cycle?

    We often get questions about where we are in the cycle. REITs and real estate are tied closely to the macro economy’s turns through expansion and recession. While the crystal ball is never very clear about the medium-term outlook, we can make several statements about recession risks. 

  • 6/17/2015

    Multifamily Starts Slip in May, But Remain on Rising Trend

    New construction of multifamily housing units slowed a bit in May from April’s torrid pace, yet remained on a rising trend. Multifamily housing starts were at an annualized rate of 349,000 units, down 18.5% from April but still well above the 300,000 unit trend that had been in place for the decade or so prior to the Great Recession. 

  • 6/5/2015

    Fundamental Forces for REITs & Real Estate Are Back on Track

    Nearly every property sector for REITs & commercial real estate depends on sustained growth of jobs, incomes and consumer spending to drive occupancy and rent growth. The latest data indicate that the recovery in the fundamentals for REITs & real estate remains on track, despite several setbacks during the winter and early spring.

  • 5/20/2015

    Multifamily REITs See an Uptick in Construction and Demand

    Builders took advantage of spring weather and broke ground on 389,000 (annualized) multifamily units in April, a 32% increase from March. After a long and snowy winter season kept many new projects on hold, the strong uptrend in construction from the past several years appears to be underway again.

  • 5/11/2015

    Job Growth Rebounds in April After Soft March Numbers

    April non-farm payrolls and unemployment numbers offer encouragement that the labor market is regaining momentum after a weak show in March. The job market added 223,000 jobs in April, matching its 2014 trend and outpacing average growth in 2015 Q1. Further, the unemployment rate fell to 5.4%, its lowest level post-recession. 

  • 5/8/2015

    Construction Spending Lower Than Expected in March 2015

    Construction spending fell nearly 60 bps to a seasonally adjusted $966.6 billion in March, its lowest level in six months. Following a flat reading in February, growth in construction spending slowed to a 2% annual rate in March.

  • 5/1/2015

    Demand for Rental Housing Remains Strong in 2015 Q1

    The fundamentals for the apartment sector continue to display strong performance. Demand for rental housing surged in the first quarter of 2015, with the total number of rental units increasing by 1.9 million units. This is the second consecutive quarter of healthy increases in rental occupancy, according to Census Bureau data beginning in 1965, surpassing a rise in rental occupancy of 1.5 million in the fourth quarter of 2007 at the onset of the housing crisis.

  • 4/28/2015

    The Housing Recovery is Back On

    After a spate of soft numbers had hinted the housing market might stall, more recent reports show the recovery is back on. If the renewed upturn shows staying power, there are important implications not only for the housing sector, but also for the broader economy… and for REITs.
    Sales of existing homes rose 6.1% in March, according to the National Association of Realtors®, to a 5.19 million unit annual rate. 

  • 4/16/2015

    A Pause in Construction, Rising Occupancy & Rents Bode Well for Multifamily REITs

    Multifamily housing starts declined in March, on the heels of a double-digit decline in February (first chart). Winter weather had an obvious impact delaying new construction across the nation in February, but the further decline in March suggests that the recent weakening of some macroeconomic trends, in part due to a stronger dollar and its impact on exports, may have damped builders’ enthusiasm for new projects. 

  • 4/13/2015

    The Steady Climb in Property Prices Buoys REIT Valuations

    Commercial property prices continued their steady march upwards in February, according to Moody’s/ Real Capital Analytics. Rising occupancy, firming rent growth, increasing transaction activity and still-muted national supply trends are boosting valuations across all property sectors.