Multifamily renters who may be looking to buy a home are finding tight supplies, escalating prices and increasing financing costs. Those market conditions mean the demand for multifamily rentals will remain elevated, according to a new research brief by Marcus & Millichap.
The report noted the number of existing houses listed for sale in February was down 32.6 percent year-over-year, the largest annual drop ever recorded. The few listings were snatched up quickly with homes staying on the market an average of 20 days, also a new low.
The lack of homes available for sale come at the same time prices to buy a house, both existing and new, are rising along with increasing financing costs. The April research brief states the median price of an existing home was up 16.2 percent year-over-year in February to $334,500.
Rising costs of labor and materials, particularly lumber, are also contributing to higher home prices. Higher lumber prices have added an estimated $24,000 over the past year to the cost of a new home, according to the National Association of Home Builders.
The combination is keeping more potential homebuyers out of the market, particularly to many renters who may be looking for homes priced less than $250,000.
By David Pickron
Recently I was at a birthday party where young children were participating in some old-fashioned games. One that struck me particularly was musical chairs. As an adult, I now realize the anxiety that was generated by that game; will I be left out or will I be the last one standing? As each round progressed and more players and chairs were removed, I could see that unique mixture of fear and fun fill the faces of these children as they competed to be the last person with a chair to call home.
Over the past year in meeting with landlords across the country, I have come to know that look all to well as we have tried to navigate the eviction moratorium that has affected our industry. You may have even seen that face in your mirror this morning.
As March 2021 ended, once again the eviction moratorium was continued to June 30. For most of us I don’t think this came as any great surprise. Even though the legislature approved rental relief for affected landlords, there just wasn’t enough time to get that money out to landlords (these are the same people who were able to get PPP business loans out and funded within weeks). I predict that this will be the last extension and I’m already prepared for many of you to let me have it if I am wrong. I hope and pray I am right. Let’s assume that I am right, and that the eviction moratorium completes its run at the end of June. The rental-housing market will immediately be thrust into an unforgiving version of adult musical chairs.
Washington, D.C. – The National Multifamily Housing Council (NMHC)’s Rent Payment Tracker found 79.8 percent of apartment households made a full or partial rent payment by April 6 in its survey of 11.6 million units of professionally managed apartment units across the country. This marks one year of tracking rent payment data following the onset of the pandemic.
This is a 1.9 percentage point increase from the share who paid rent through April 6, 2020 and compares to 82.9 percent that had been paid by April 6, 2019. This data encompasses a wide variety of market-rate rental properties across the United States, which can vary by size, type and average rental price.
“This month’s data is more evidence of a recovering economy and the resilience of the multifamily industry,” said Doug Bibby, NMHC President. “While we are not out of the woods yet, there is light at the end of the tunnel. The recently passed American Rescue Plan included $26 billion in rental assistance as well as billions more of housing resources that will prove critical to keeping families safely and securely housed and the nation’s rental housing sector stable.
“As we look forward to growing housing demand and a return to normalcy, it is imperative that temporary policies put in place in response to the pandemic are carefully considered. Specifically, the current extension of the national eviction moratorium should be the last. Moratoriums do not address the underlying financial stress of apartment residents; instead, they force households to accumulate insurmountable levels of debt.
“The industry and its residents have weathered the last year with creativity, compassion and dedication. Now is the time for lawmakers to move ahead with policies aimed at solving the housing affordability challenges that predated the pandemic.”
The NMHC Rent Payment Tracker metric provides insight into changes in resident rent payment behavior over the course of each month, and, as the dataset ages, between months. While the tracker is intended to serve as an indicator of resident financial challenges, it is also intended to track the recovery as well, including the effectiveness of government stimulus and subsidies.
WASHINGTON, D.C. (April 1, 2021) – Delinquency rates for mortgages backed by commercial and multifamily properties decreased again in March, reaching the lowest level since the onset of the COVID-19 pandemic, according to the Mortgage Bankers Association’s (MBA) latest monthly CREF Loan Performance Survey. The survey was developed to better understand the ways the COVID-19 pandemic is impacting commercial mortgage loan performance.
“Commercial and multifamily mortgage delinquencies fell for the third straight month in March and are now at their lowest level since the pandemic disrupted the economy and commercial real estate a year ago,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “There continues to be significant differences in loan performance by property type, with higher delinquencies rates for lodging- and retail-backed mortgages.”
Key Findings from MBA’s CREF Loan Performance Survey for March 2021:
Urban living still appeals to high income earners, and renters living in big cities are less likely to relocate to suburbs, according to a new study from StorageCafe.
Amid a year defined by significant disruptions, the rental market saw an increase in the share of Americans relocating – 18 percent more renters changed residences in 2020 compared to 2019. Out of all the renters moving, 68 percent of people picked urban living over the suburbs
Despite the pandemic and many renters moving for reasons related to COVID-19, the “exodus towards suburban or smaller towns that many anticipated on a grand scale actually materialized for a smaller fraction of the renter cohort,” the study says.
While about 32 percent of renters who wanted to move did choose the suburbs in the last year, that number is close to pre-pandemic renter patterns.
Highlights of the report:
To get in front of potential renters and to stay in touch with current renters, emails are a powerful tool. Everyone checks their inboxes several times a day, yet the success of your email campaigns depends on open rates. Crafting great emails takes a lot of time and thoughtfulness, but all that hard work can go to waste without an open.
So how could your email subject line catch the eye of the recipients? First of all, brevity is extremely important. Emails with subject lines of six to 10 words have the highest open rates, according to research from marketing tech company Retention Science. Additionally, you need to consider the fact that most people check their emails using their mobile phones and that small screen will unavoidably truncate part of your email subject line.
Being concise, however, means that you need to constantly explore your creativity and come up with catchy phrases. Here are three key ingredients of great email subject lines for more opens by prospects, according to Geneva Ives, marketing content manager at Yardi:
Up to 90 cents of each dollar paid for rent go towards taxes, wages, mortgage payments, and maintenance and improvements, while only 10 cents belong to owners and investors, according to the Yardi Matrix Covid-19 Rental Housing Support Initiative.
In their blog, RentCafé says the American Rescue Plan signed by President Biden on March 11 “brings much-anticipated relief to millions of American families, both renters and housing providers.”
Rent debt estimated at almost $60 billion has built up since the start of the pandemic and RentCafé says the new stimulus package “may trigger a butterfly effect across local communities. Since many housing providers operate on thin margins, the recently approved stimulus package will help fill the gap in cash flow and keep afloat an industry that provides housing for 40 million Americans.”
According to the Urban Institute and Moody’s Analytics estimations, the average resident who’s behind on rent already owes $6,000. With approximately 10.25 million renters in debt as of January 2021, the back rent reached an estimated $57.3 billion.
The report from RentCafé includes a chart showing the largest part of every dollar of rent is used to keep rental housing operational, as 90 cents of it go towards state and local taxes, which support essential services in the community, employee wages, maintenance and improvements, and mortgage payments. Just 10 cents go to property owners and investors.
With the federal ban on evictions set to expire in two days, the Centers for Disease Control and Prevention has once again extended the eviction moratorium, this time through June 30. This marks the third time an extension has been granted. The CDC first put the order into affect in September 2020 and was set to conclude at the end of the year. In December, it was then extended for a second time through Jan. 31. Once President Joe Biden went into office, one of the first acts he made was calling the CDC to extend the moratorium on evictions for non-payment of rent through March 31.
However, many of those in the multifamily industry expressed concern over this decision. In a joint statement from the National Multifamily Housing Council and the National Apartment Association, the groups once again expressed disappointment, much like they did previously back in January. The groups mentioned that housing providers have hit the end of their resources after dealing with eviction moratoriums for more than a year, in addition to the financial distressed brought upon by the pandemic.
“Another extension only serves to exacerbate the challenges facing the rental housing industry and does not address the underlying financial stress of apartment residents, instead forcing households to accumulate insurmountable levels of debt,” the statement said.
Earlier this month, NMHC released the results of its rent collections report, stating that 80.4 percent of U.S. rental households have made rent payments as of March 6. The report came the same week as the $1.9 trillion COVID-19 relief bill was approved and signed into law by President Biden.
The groups stated that direct financial assistance has shown to be the most effective when it comes to keeping residents safe and securely housed. The almost $50 billion allocated for rental assistance “will prove critical in helping those in need as the country emerges from the pandemic, and we must shift focus from legally uncertain federal eviction moratoriums to swift distribution and continued rental assistance funding,” according to the statement.
“Evicting tenants in violation of the CDC, state, or local moratoria, or threatening to evict them without apprising them of their legal rights under such moratoria, may violate prohibitions against deceptive and unfair practices, including under the Fair Debt Collection Practices Act and the Federal Trade Commission Act,” said Federal Trade Commission Acting Chairwoman Rebecca Kelly Slaughter and Consumer Financial Protection Bureau (CFPB) Acting Director Dave Uejio in the release.
The FTC warns landlords, “We will not tolerate illegal practices that displace families and expose them—and by extension all of us—to grave health risks.
“In the ongoing economic and public health crisis, millions of American families are at risk of losing their homes. A recent CFPB report found that renters are particularly endangered, with over 8.8 million tenants behind on rent. These tenants at risk of homelessness are disproportionately people of color, primarily Black and Hispanic families.
“Federal, state, and local governments have put in place protections against evictions to keep people in their homes and to stop the spread of COVID-19. Research has shown that eviction moratoriums save lives.”
The CDC on March 29 extended the federal moratorium on evictions by three months.