• The Fed’s accommodative shift amid an already-low interest rate environment appears to have begun reinvigorating the U.S. housing market.
  • This week produced strong new home sales data while new mortgage activity remains elevated for this time of year. Recent data in parts of the commercial real estate (CRE) market has shown similar strength. August housing starts and building permits came in well above expectations, and both numbers were driven by significant activity in the multifamily market.1
  • To this end, the National Association of Home Builders (NAHB) provided further evidence that activity within the multifamily market has recently jump-started.
  • The NAHB Multifamily Production Index (MPI), which is a broad measure of multifamily builder and developer confidence, jumped 40% in Q2 from a quarter earlier.2 In the same time frame, the Multifamily Vacancy Index declined 15%.2
  • It’s important to note among these statistics that the pace of price growth across the multifamily sector has slowed this year along with most other segments of the CRE market. However, today’s rate and employment environments should both provide a layer of support to this sector, as well as the broader CRE market, moving forward.

1 Bloomberg Finance, L.P., as of September 19, 2019.
2 National Association of Home Builders, http://bit.ly/2WoHpDK.

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