November 2024 – REI INK

Pending Home Sales Rise After Post-Election Surge in Home Tours

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Pending sales posted a big year-over-year increase this week, partly because the boom in early-stage homebuying demand Redfin saw just after the election is translating to sales and partly because Redfin is comparing it to a period in 2023 that included Thanksgiving. U.S. pending home sales rose 12.1% year over year during the four weeks ending November 24, the biggest increase since May 2021. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. One reason for the outsized increase is that early-stage homebuying demand, including home tours, boomed in the two weeks following the presidential election. But another notable reason is that Redfin is comparing it to a period in 2023 that included Thanksgiving, a time of year when home sales are typically very slow. Redfin will know in the next few weeks whether the increase in pending sales is a Thanksgiving mirage or a sign of sustained strength in the housing market. Mortgage purchase applications are up 12% week over week, though home tours and other early-stage signals have tapered off. Redfin’s Homebuyer Demand Index—a measure of tours and other buying services from Redfin agents—fell to its lowest level in over two months during the week ending November 24, though it’s up 7% year over year. The recent dip in early-stage demand follows two weeks of big upswings; the demand index hit its highest level in nearly a year and a half in mid-November. On the selling side, new listings are up 10.6% year over year, the biggest increase since April. That’s also due partly to the fact that Thanksgiving fell into last year’s comparable period. Like the surge in pending sales, Redfin will know more soon about whether the improvement in new listings is here to stay. For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page. Leading indicators Indicators of homebuying demand and activity Value (if applicable) Recent change Year-over-year change Source Daily average 30-year fixed mortgage rate 6.95% (Nov. 26) Down from 7.08% one week earlier Down from 7.3% Mortgage News Daily Weekly average 30-year fixed mortgage rate 6.81% (week ending Nov. 27) Highest level since July Down from 7.29% Freddie Mac Mortgage-purchase applications (seasonally adjusted) Up 12% from a week earlier (as of week ending Nov. 22) Up 52% Mortgage Bankers Association Redfin Homebuyer Demand Index (seasonally adjusted) Down 5% from a month earlier(as of week ending Nov. 24) Up 7% Redfin Homebuyer Demand Index a measure of tours and other homebuying services from Redfin agents Touring activity Down 8% from the start of the year (as of Nov. 25) At this time last year, it was down 42% from the start of 2023 ShowingTime, a home touring technology company Google searches for “home for sale” Unchanged from a month earlier (as of Nov. 25) Unchanged Google Trends Key housing-market data U.S. highlights: Four weeks ending Nov. 24, 2024Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision. Four weeks ending Nov. 24, 2024 Year-over-year change Notes Median sale price $386,625 7% Biggest increase since Sept. 2022 Median asking price $385,975 5.4% Median monthly mortgage payment $2,578 at a 6.81% mortgage rate 2% Pending sales 71,773 12.1% Biggest increase since May 2021 (please note that we’re comparing to a period in 2023 that included Thanksgiving) New listings 74,118 10.6% Biggest increase since April(please note that we’re comparing to a period in 2023 that included Thanksgiving) Active listings 1,010,868 12.4% Smallest increase since March Months of supply 3.9 -0.2 pts. 4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions. Share of homes off market in two weeks 29.3% Down from 34% Median days on market 42 +7 days Share of homes sold above list price 25% Down from 27% Average sale-to-list price ratio 98.6% -0.1 pt. Metro-level highlights: Four weeks ending Nov. 24, 2024Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy. Metros with biggest year-over-year increases Metros with biggest year-over-year decreases Notes Median sale price Philadelphia (21.8%)Newark, NJ (17.1%)Miami (13.7%)Cleveland (13.6%)Detroit (12.7%) Tampa, FL (-1%) Declined in 1 metro Pending sales San Jose, CA (23.7%)New York (23.7%)San Francisco (23.6%)Dallas (22.4%)Las Vegas (20%) Miami (-6.3%)West Palm Beach, FL (-4.9%)Fort Lauderdale, FL (-3.3%) Declined in 3 metros New listings San Francisco (31.2%)Washington, D.C. (27.9%)Seattle (25.2%)New York (23.9%)Baltimore (18.6%) Austin, TX (-14.2%)San Antonio (-9.7%)Atlanta (-5.5%)Orlando, FL (-0.1%) Declined in 4 metros To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-homebuying-demand-thanksgiving/

Everything You Need to Know About Renting But Didn’t Know to Ask

In this episode of Uncontested Investing, we’re sitting down with Jonas Bordo, CEO of Dwellsy, to explore how his innovative platform is transforming the rental experience for both renters and landlords. Jonas recounts his journey from managing 60,000 rental units to founding Dwellsy, a startup prioritizing transparency and innovation in the rental market. Jonas also introduces exciting new tools like CompIQ, a customizable comparables engine for investors. Whether you’re a renter, landlord, or real estate investor, this episode provides actionable insights and inspiration! Quotables “Renting should be a great experience, but for most people, it’s not. We’re here to change that.” “Your network and mentors shape your success. Always look for opportunities to pay it forward.” “Dwellsy is more than a marketplace; we’re a data company that provides tools to transform how landlords and renters connect.” Links Dwellsy https://www.dwellsy.com CompIQ https://www.dwellsy.com/compiq Everything You Need to Know About Renting But Didn’t Know to Ask https://www.amazon.com/Everything-Nee… RCN Capital https://www.rcncapital.com/podcast REI INK https://rei-ink.com/

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Residential Lending Grows Just 2 Percent Even as Rates Keep Declining; Refinance and Home-Equity Deals Rise While Purchase Loans Decrease ATTOM, a leading curator of land, property data, and real estate analytics, released its third-quarter 2024 U.S. Residential Property Mortgage Origination Report, which shows that 1.67 million mortgages secured by residential property (1 to 4 units) were issued in the United States during the third quarter. That led to modest quarterly and annual increases of 1.9 percent. The growth marked the second straight quarterly gain – a pattern not seen for more than three years. But even as home-mortgage rates dropped close to 6 percent for a 30-year fixed loan by the end of Q3 2024, the increase in business for lenders was far below a spike during the Spring of 2024 and still left total mortgages off by nearly two-thirds from a high point hit in 2021. The latest trend resulted from improvements in refinance and home-equity lending as opposed to more buyers taking out loans. Mortgage rollovers increased 6.9 percent quarterly, to about 588,000, while home-equity packages went up 2.3 percent, to roughly 297,000. Those improvements more than made up for a 1.7 percent decrease in purchase loans, to 782,000, as the annual peak home-buying season wound down and supplies of properties for sale remained tight. Measured monetarily, lenders issued roughly $550 billion worth of residential mortgages in the third quarter of 2024. That was up 2.9 percent from the second quarter of 2024 and 6.6 percent from the third quarter of last year. The differing pattern of increases among various loan types slightly raised the portion of all residential mortgages represented by refinance and home-equity credit lines, while lowering the purchase component. Still, purchase loans remained the most common form of mortgages around the U.S. during the third quarter, comprising almost half. “Mortgage lending rose again in the third quarter, but at a far slower pace than during the Spring of this year when activity spiked nearly 25 percent,” said Rob Barber, CEO at ATTOM. “The latest increase, small as it was, likely came mainly from homeowners trading higher-rate loans they got in 2021 and 2022 for cheaper mortgages resulting from declining mortgage rates. But it looked like the third-quarter rate dip wasn’t as helpful for purchase lending as buyers kept facing elevated prices and low supplies of properties for sale.” The latest lending trends reflected another round of mixed forces affecting home sales and the cost of borrowing. Average 30-year mortgage rates dropped a full percentage point in the third quarter, the kind of decline that can save homeowners thousands of dollars a year on all kinds of loans. But the number of homes for sale remained at some of the lowest levels in the past decade, which continues putting a damper on the market, and purchase loans. Total lending up again but still far below peaksBanks and other lenders issued a total of 1,666,816 residential mortgages in the third quarter of 2024, up from 1,636,073 in the second quarter of 2024 and from 1,635,056 in the third quarter of 2023. Total activity rose for the second quarter in a row – a pattern that hadn’t happened since early in 2021. But the latest figure still remained 60 percent behind a recent high point of 4,165,695 hit in the first quarter of 2021 when average 30-year mortgages rate hovered around 3 percent. A total of $553.1 billion was lent to homeowners and buyers in the third quarter of this year. That was up from $537.5 billion in the prior quarter and from $518.6 billion in the third quarter of 2023, although still less than half the recent peak of $1.3 trillion in 2021. Overall lending activity also rose quarterly and annually in a majority of metropolitan areas around the U.S. with enough data to analyze. The total increased from the second quarter to the third quarter of this year in 125, or 60.4 percent, of the 207 metropolitan statistical areas that had a population of 200,000 or more and at least 1,000 total residential mortgages issued from July through September of 2024. The largest quarterly increases came in Anchorage, AK (total lending up 78.6 percent from the second quarter of 2024 to the third quarter of 2024); Yuma, AZ (up 33.3 percent); Ann Arbor, MI (up 33 percent); Huntington, WV (up 21 percent) and Trenton, NJ (up 20.5 percent). Metro areas with a population of least 1 million that had the biggest increases in total loans from the second to the third quarter of 2024 were Rochester, NY (up 20.1 percent); Detroit, MI (up 14.7 percent); Grand Rapids, MI (up 13.5 percent); San Diego, CA (up 13.2 percent) and Hartford, CT (up 12.7 percent). Metro areas with enough data to analyze where lending went down the most quarterly were Boulder, CO (down 44.3 percent); St. Louis, MO (down 36.5 percent); Jackson, MS (down 25.2 percent); Myrtle Beach, SC (down 20.4 percent) and Springfield, MO (down 19.4 percent) Measured annually, the largest increases in total lending among metro areas with a population of at least 1 million were in Orlando, FL (total lending up 29.3 percent from the third quarter of 2023 to the third quarter of 2024); San Jose, CA (up 28.7 percent); San Diego, CA (up 27.9 percent); Honolulu, HI (up 25.9 percent) and Tucson, AZ (up 17.6 percent). Purchase mortgages decline amid tight market but still make up almost 50 percent of all lendingWhile overall third-quarter lending activity increased, the number of mortgages issued to home buyers was down both quarterly and annually. The count of purchase loans remained only half of where it stood in 2021. The third-quarter total of 782,220 was off from 796,046 in the second quarter of 2024, 814,610 in the third quarter of 2023 and 1.6 million in mid-2021. The latest dollar volume of purchase loans, $306.6 billion, was 2.5 percent less than the $314.3 billion second-quarter level, although still up 0.8 percent from $304.1 billion a year earlier. It sat 43 percent below the 2021 peak Residential purchase-mortgage originations decreased quarterly in 55.1 percent of the 207 metro areas in the report and annually in 56 percent of those markets. The largest quarterly decreases were in Boulder, CO (purchase loans down 50.1 percent from the second quarter of 2024 to the third quarter of 2024); St. Louis, MO (down 42.4 percent); Springfield, MO (down

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Economy Remains on Strong Footing, though Core Inflation Remains Sticky Existing home sales are now expected to rise only 4 percent next year from a 2024 pace that is on track for a nearly 30-year low, according to the November 2024 commentary from the Fannie Mae (OTCQB: FNMA) Economic and Strategic Research (ESR) Group. The downward revision to the existing home sales outlook, which was previously forecast to rise 11 percent in 2025, is the result of significant upward movement in mortgage rates and other long-duration bonds in recent weeks. Whereas previously the ESR Group had expected mortgage rates to dip below 6 percent in early 2025, the revised forecast now shows mortgage rates ending 2025 at 6.3 percent and remaining above 6 percent through 2026. The ESR Group does expect a significant improvement in existing home sales of around 17 percent in its inaugural 2026 forecast, as affordability conditions improve, the lock-in effect weakens, and pent-up demand to move materializes. Furthermore, the ESR Group continues to expect new home sales to improve on already-robust levels in both 2025 and 2026, as homebuilders continue to offer buyers incentives to move existing inventories. The ESR Group’s economic growth outlook is little changed this month, with minor upward revisions to near-term growth in personal consumption. Its 2026 GDP forecast sees the economy continuing to grow near its long-run trend rate of about 2.2 percent. Of note, the ESR Group now expects core inflation, for which further progress has largely stalled in recent months, to remain elevated in the near term. This is offset somewhat by the expectation for lower oil prices due to recent movements in oil markets and a softer global demand outlook, which will likely work to keep topline inflation measures below core inflation through 2025. The ESR Group expects core inflation to return to the Fed’s 2 percent target by the second quarter of 2026, but it now expects somewhat less monetary policy easing in 2025 than previously forecasted. “Long-run interest rates have moved upward over the past couple months following a string of continued strong economic data and disappointing inflation readings,” said Mark Palim, Fannie Mae Senior Vice President and Chief Economist. “To the extent that the recent run-up in rates has been driven by market expectations of stronger economic growth, we think this bodes well for the labor market outlook and home purchase demand. However, we expect inventories of homes added to the market, and therefore sales of existing homes, to remain subdued through next year, as the higher mortgage rate environment is likely to strengthen the ongoing lock-in effect. How these competing forces balance out is currently an open question, but for now we continue to expect affordability to remain the primary constraint on housing activity through our forecast horizon.” Visit the Economic and Strategic Research site at fanniemae.com to read the full November 2024 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary. To receive e-mail updates with other housing market research from Fannie Mae’s Economic and Strategic Research Group, please click here. SOURCE Fannie Mae

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Growing supply of multifamily housing suggests a 1.1% increase in rental stock to more than 49 million units by next fall, with the biggest increases in the South and West. Rents fell by -0.8% to $1,720 in October, marking their fifteenth consecutive month of year-over-year declines and falling the most for smaller-sized units, according to the Realtor.com® October Rental Report. Looking ahead, new rental properties coming onto the market are expected to put continued downward pressure on rents next year. “New multifamily construction projects started in the last two years have hit the market in 2024, with a greater supply of units helping to soften rents and bring renters some relief,” said Danielle Hale, chief economist at Realtor.com®. “While we expect fewer multifamily homes to be finished in 2025, we still anticipate enough to increase supply, which will keep downward pressure on rents.” Growing rental supply remains key for 2024 and 2025 rental marketMore completed multi-family homes made their way to the market in 2024 as projects begun in 2022 and 2023 were finished. Between January and September 2024, the average seasonally adjusted annual rate of multi-family completions reached 606,000 units, up from 445,000 units in the same period in 2023, and higher than the 2017-19 pre-pandemic average of 359,000 units. While a lower rate of completions is anticipated for next year, rental housing stock is still expected to rise by 1.1% to more than 49 million units by fall 2025, which would be 6.7% higher than in the fall of 2019, before the pandemic. Rental stock is expected to increase most in the South by fall 2025New multifamily completions rose in all regions of the country this year, with the biggest year-over-year gains seen in the South (49.1%) followed by the Midwest (44.9%), West (23.9%) and Northeast (7.4%). That has translated to lower median asking rents. In the South, the biggest annual drops in median asking rent in October were seen in Memphis, Tenn. (-5.4%), and Nashville, Tenn. (-5.2%). In the Midwest, the biggest annual decline was in Chicago (-4.1%) and in the West, rent declines were led by Denver (-5.6%) and Phoenix (-4.5%). Large Northeastern metro areas, such as New York (0.4%), have seen small increases in rent due to relatively slower increases in the supply of new rental homes. By fall 2025 rental stock is estimated to increase most in the South, with a 1.5% year-over-year increase, followed by the West (1.2%), Midwest (0.9%) and Northeast (0.7%). That will translate to increases in the overall rental stock by 8.9% in the South, 8.6% in the West, 5.0% in the Northeast and 1.7% in the Midwest compared to pre-pandemic levels. Rents decline across all unit sizesOctober saw the fifteenth straight month of year-over-year rent declines for 0-2 bedroom properties. The median asking rent fell by $14, or -0.8%, to $1,720. That’s still just $40 (-2.3%) lower than its August 2022 peak, and is $272 (18.8%) higher than the same time period in 2019. All unit sizes saw rent declines in October, with the biggest drops in smaller-sized units. The median rent for studios fell -1.2% year-over-year, to $1,436. That’s down -3.6% from its October 2022 peak but is 12.5% higher than five years ago. The median rent for one-bedroom units fell -0.9% to $1,600, 17.1% higher than five years ago. And the median rent for two-bedroom units fell -0.7% to $1,908, which is 21.1% higher than five years ago. National Rental Data – October 2024 Unit Size Median Rent Rent YoY Rent Change – 5 years Overall $1,720 -0.8 % 18.8 % Studio $1,436 -1.2 % 12.5 % 1-bed $1,600 -0.9 % 17.1 % 2-bed $1,908 -0.7 % 21.1 % SOURCE Realtor.com

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Price increases continue to slow down after post-COVID surge, but have risen almost 70% in the past decade The cost of home repairs and remodeling in the third quarter of 2024 continued to increase, rising by 1.08% from the prior quarter and just over 3.35% from the third quarter of 2023 according to the Q3 2024 Verisk Remodel Index. Costs set new highs for the past decade, rising over 69.5% from the first quarter of 2013. The Verisk Remodel Index tracks costs on 31 different categories of home repair, covering over 10,000 line items ranging from appliances to windows. Data are compiled monthly in over 430 local market areas across the country. “Repair and remodeling costs continue to increase across the country, but the rate of increase is returning to pre-pandemic levels,” said Greg Pyne, VP, Pricing for Verisk Property Estimating Solutions. “In the most recent quarter, those increases appear to have been driven largely by increased labor costs rather than rising material prices.” The two categories reporting the highest quarterly increases – painting the exterior of a home, which rose 3.36%, and replacing tile flooring, which rose 2.18% – are two jobs where labor costs comprise a very high percentage of the cost of the job. Almost 55% of exterior painting costs are from labor, while almost 64% of the cost of replacing tile flooring is from labor. Quarterly cost trends varied across the 31 categories included in the report: prices increased in nine categories; stayed the same in eight; and decreased in 14. Some notable changes in costs: Concrete and Asphalt, which accounts for about three percent of repair costs nationally, saw costs rise by 0.12%, the highest increase among all the categories; Siding, which makes up the largest percentage of costs, rose 0.7%; and Cabinetry had the largest quarterly decrease in costs, falling by 0.11%. Quarter-over-quarter repair and remodeling costs rose more quickly than home prices during the same period, up 1.08% compared to a 0.2% quarterly increase according to price information reported by ATTOM in its Q3 2024 Home Sales Report. Conversely, home prices rose at a brisker pace than repair and replacement costs over the past year – 5.3% to 3.35%. Both home prices and repair costs outpaced the rate of inflation in the third quarter, when the government’s Consumer Price Index sat at 2.1% and the Personal Consumption Expenditure Index was 2.2%. South Atlantic and Mountain States Have Highest Quarterly and Annual Gains All regions again experienced cost increases both quarterly and annually. Quarterly increases ranged from a low of 0.84% in the East South Central and West South Central Regions to 1.21% in the Mountain Region. All regions experienced annual increases of over three percent, ranging from a low of 3.03% in the West South Central Region to 3.68% in the South Atlantic Region. These numbers confirm that repair and remodel costs may be moderating, according to Pyne. “A year ago, annual increases were over five percent in every region, and over six percent in the East North Central, Mountain, and New England Regions. So it does appear that while prices continue to rise, they’re doing so at a slower pace.” Q1-Q2 2024 Q2-Q3 2023 Q3 2023-2024 East North Central 1.12% 0.94% 3.26% East South Central 1.14% 0.84% 3.23% Mid-Atlantic 0.95% 0.90% 3.08% Mountain 1.21% 1.21% 3.58% New England 1.09% 0.86% 3.24% Pacific 1.03% 0.90% 3.04% South Atlantic 1.03% 1.49% 3.68% West North Central 1.19% 1.17% 3.48% West South Central 1.01% 0.84% 3.03% Northeastern States Have Both the Highest and Lowest Rates of Increase Washington, D.C. had the highest quarterly rate of increase in the country at 3.76%, the only area to surpass a two percent increase for the reporting period. Delaware (1.95%), Utah (1.79%) and Kansas (1.66%) and Montana (1.59%) all reported increases over 1.5%. Kentucky had the lowest rate of cost increases at 0.62%, followed by Oklahoma (0.66%), Arizona (0.68%), Arkansas (0.70%), and Mississippi (0.70%). Methodology The Verisk Remodel Index tracks costs on 31 different categories of home repair, comprising over 10,000-line items including appliances, doors, framing, plumbing, windows. Prices are compiled and updated monthly in over 430 local market areas across the country. The index cost basis is January 2013, and the report is updated quarterly. About Verisk Verisk is a leading strategic data analytics and technology partner to the global insurance industry. It empowers clients to strengthen operating efficiency, improve underwriting and claims outcomes, combat fraud and make informed decisions about global risks, including climate change, extreme events, ESG and political issues. Through advanced data analytics, software, scientific research and deep industry knowledge, Verisk helps build global resilience for individuals, communities and businesses. With teams across more than 20 countries, Verisk consistently earns certification by Great Place to Work and fosters an inclusive culture where all team members feel they belong. Verisk is traded on the Nasdaq exchange and is a part of the S&P 500 Index and the Nasdaq-100 Index. For more information, please visit www.verisk.com. Contact: Rick Sharga CJ Patrick Company (949) 322-4583 rick.sharga@cjpatrick.com