MARKET TRENDS BLOG POST

Did You Know?

- 10/25/21

Demand for single-family rental homes is showing no sign of easing up, and that is pushing rents through the roof, especially for the highest-priced properties. Investors are now flooding into the market again, after falling back a bit during the first year of the Covid pandemic. Nationally, rents rose 9.3% in August, year over year, up from a 2.2% year-over-year increase in August 2020. There are several reasons for the investor demand:

1. Worldwide bond yields are at historic lows, and investors need yield.
2. Inflation is on the rise, and most investors view rental homes as an inflation hedge.
3. Record high rent growth is supported by high occupancy rates.
4. Renters have demonstrated that they are willing to pay a premium to rent in a new home neighborhood managed by a professional landlord. (CNBC)

While refinance originations could drop 62% in 2022 to $860 billion, mortgage originations for the purpose of buying a home are forecast to rise 9% to a new record of $1.73 trillion in 2022. (CNBC)

The average 30-year fixed mortgage rate rose to 3.05% last week, according to Freddie Mac, the highest level since April though still low by historical standards. The shift means home buyers are better positioned to negotiate a lower interest rate since higher rates reduce the number of re-fi's allowing homebuyers to be more attractive to bankers.... (WSJ)

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