2024 – Page 59

Mortgage Rate Optimism Hits Survey High

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Consumer Sentiment toward Housing at Highest Level in Nearly Two Years The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased 3.5 points in January to 70.7, its highest level since March 2022, due primarily to increased consumer confidence in job security and another significant jump in the share of consumers expecting mortgage rates to decrease. In January, 82% of consumers indicated that they are not concerned about losing their job in the next 12 months, up from 75% last month. Additionally, an all-time survey-high 36% of respondents indicated that they expect mortgage rates to go down in the next 12 months, while 28% expect them to go up, and 35% expect rates to remain the same. However, consumer perceptions of homebuying conditions remain overwhelmingly pessimistic, with only 17% of consumers indicating it’s a good time to buy a home. Overall, the full index is up 9.1 points year over year. “Mortgage rate optimism increased markedly again in January, with a survey-high percentage of consumers anticipating mortgage rate declines over the next year,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “For the first time in our National Housing Survey’s history, a greater share of consumers believe mortgage rates will decrease over the next year, rather than increase. Consumers also expressed greater confidence in their job situations this month, another sign that housing sentiment may continue to improve in 2024.” Duncan continued: “However, while home affordability may improve if actual mortgage rates continue moving downward, other parts of the affordability equation have yet to ease or improve for consumers. A large majority still think home prices will either increase or stay the same; the ‘good time to buy’ component continues to hover near its historical low; and fewer than one-in-five respondents indicated that their household income was significantly higher year over year, matching a survey low. All in all, while a lower mortgage rate path supports our forecast for a gradual increase in housing demand and sales activity in 2024, until we see a meaningful increase in housing supply, we expect affordability will remain a significant barrier to homeownership for many households.” Home Purchase Sentiment Index – Component HighlightsFannie Mae’s Home Purchase Sentiment Index (HPSI) increased in January by 3.5 points to 70.7. The HPSI is up 9.1 points compared to the same time last year. Read the full research report for additional information. To receive e-mail updates with other housing market research from Fannie Mae’s Economic & Strategic Research Group, please click here. SOURCE Fannie Mae

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Multifamily construction starts expected to continue to moderate this year Multifamily construction starts declined in 2023, but exceeded expectations considering the turmoil in the financial markets. A new report on multifamily construction starts from Yardi® Matrix states that the number of units that broke ground in 2023 ranks third in recent years, behind 2022 and 2021. Full year data for 2023 is collected with a lag. As such, data shows that there were 506,742 new construction starts in 2023, which is 25.3 percent below the 2022 volume. Of these, 454,182 units broke ground during the first three quarters, marking an 11.6 percent decrease from the volume recorded over the same interval in 2022. The decline in construction starts started in the third quarter. “Yardi Matrix expects new construction to remain on a moderating trend in 2024. Meanwhile, multifamily completions will remain elevated in 2024 and early 2025 and will not bottom out until 2026,” say Matrix analysts. Construction trends vary geographically. Half of the 678,771 units that broke ground in 2022 occurred in 22 markets, and during the first three quarters of 2023, 18 of these markets registered declines in new construction. Some posted declines of more than 40 percent, such as Indianapolis, Salt Lake City, Austin and Seattle. The highest declines were recorded in the Bay Area-South Bay (down 72.4 percent), Urban Chicago (down 55 percent) and Las Vegas (45.8 percent). New construction remained on an upward trend in Phoenix, North Dallas, Raleigh-Durham and Tampa-St. Petersburg-Clearwater and picked up in Boston and Kansas City. The composition of construction starts changed over the last decade. Affordable housing grew from 8.4 percent of the pipeline in 2013 to 13.4 percent in 2023, while the share of single family rentals increased from less than 1 percent in 2013 to 5.8 percent in 2023. Review the latest bulletin on Multifamily Construction Starts from Yardi Matrix. Yardi Matrix offers the industry’s most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. Yardi Matrix covers multifamily, student housing, vacant land, industrial, office, retail and self storage property types. Email matrix@yardi.com, call 480-663-1149 or visit yardimatrix.com to learn more. About Yardi Yardi® develops industry-leading software for all types and sizes of real estate companies across the world. With over 9,000 employees, Yardi is working with our clients to drive significant innovation in the real estate industry. For more information on how Yardi is Energized for Tomorrow, visit yardi.com. SOURCE Yardi

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Throughout the country, incidences of rental application, financial and identity fraud are on the rise and fueled by social media. Results from a groundbreaking new survey of rental housing providers have revealed staggering increases of fraud, contributing to both the growth in rents and number of evictions. A vast majority of respondents (70.7%) reported experiencing an increase in fraudulent applications and payments, utilizing fraudulent documentation, financial statements and even identities in the past twelve months. Driven in part by social media platforms such as TikTok and Instagram, the rise in false rental housing applications is exacerbating rental costs, fueling the housing affordability challenges facing communities across the country and undermining the credibility of eviction data. These fraudulent incidents consist of a wide range of wrongdoing, including criminal behavior. One of the most notable findings in the survey was the share of evictions tied to fraudulent applications with respondents reporting that, on average, 23.8% of their eviction filings were linked to fraudulent applications and related failure to pay rent over the past three years. This in turn leads to higher costs for rental housing providers and, ultimately, the renters they house. The average respondent was required to write off nearly $4.2 million in bad debt over the past 12 months. Respondents reported that approximately a quarter (24.5%) of this bad debt, on average, could be attributed to nonpayment of rent due to fraudulent applications. “There has been anecdotal evidence of the rise in fraudulent activity over recent years, but now we have clear evidence of the staggering impact of these crimes on the rental housing market,” said NMHC President Sharon Wilson Géno. “While most renters are honest, those who are not are causing the cost of rental housing to increase for everyone. Additional delays in many jurisdictions in the lease enforcement process, even when there is clear fraud, incentivizes bad actors and means that this illegal behavior costs responsible renters even more. We call on lawmakers and courts to take action that will address this problem.” This new survey of rental housing providers conducted by the National Multifamily Housing Council (NMHC) found that nearly all respondents (93.3%) reported experiencing fraud in the past twelve months. Of those who experienced fraud: Respondents who observed an increase in fraudulent applications and payments reported a 40.4% average increase over the past 12 months. Sixty seven percent of those who experienced an increase in fraudulent applications and payments said that this varied by jurisdiction, and many (46.9%) called out Atlanta specifically as a jurisdiction where increases in fraud were most concentrated. Residents and rental housing providers can learn more about avoiding fraud and scams through this Consumer Financial Protection Bureau resource. The NMHC Pulse Survey on Operational Impact of Rental Application Fraud and Bad Debt was conducted from November 15, 2023, to January 9, 2024, and received responses from NMHC and National Apartment Association (NAA) members representing 75 leading apartment owners, developers and managers. The full survey can be found here. Contacts Colin Dunn202/974-2370cpdunn@nmhc.org

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Award from GlobeSt. Honors Company’s Impact on Multifamily Industry PetScreening, which offers the rental housing industry’s first and leading pet policy management software at no charge to property owners and managers, announced it has been named a 2024 Influencer in Commercial Real Estate Technology by GlobeSt. The awards program recognizes companies and individuals who provide innovative technology applications for property owners and operators in the multifamily, retail, industrial, office, hospitality and healthcare real estate sectors. PetScreening and the additional honorees are profiled in a feature article on GlobeSt.com. “We are truly honored and humbled to receive this award,” said John Bradford, founder and CEO of PetScreening. “It is our company’s mission to provide powerful, yet easy-to-use technology that enables rental housing operators to embrace pet-inclusivity while also efficiently managing risk. This recognition provides yet more evidence that we are succeeding in that mission.” PetScreening’s Influencer status stems in part from its wide reach and impact across the multifamily industry. PetScreening is now serving more than 5 million apartments and rental homes across approximately 23,000 rental communities and properties. Prominent multifamily clients include Greystar, Willow Bridge, Equity Residential and ZRS Management. The company estimates it has helped owners and operators capture more than $72 million in pet-related revenue that otherwise would have been lost. It has generated over 3.5 million user profiles and completed more than 500,000 assistance animal reviews. The Influencer in Commercial Real Estate Technology award adds to a slew of recent honors for PetScreening. In 2023, the company was named the Software Solutions Company of the Year by the NC Tech Association, designated the Landlord/Owner Technology of the Year by the Information Management Network, included in the annual Inc. 5000 ranking for a second straight year and named to the Deloitte Technology Fast 500. In addition, Pat Patterson, PetScreening’s senior director of business development, enterprise, was honored as a Multifamily Influencer by GlobeSt. Real Estate Forum, while Chief Financial Officer Ellen Sondee was anointed CFO of the Year by the Charlotte Business Journal. About PetScreeningOffering the industry’s first and leading pet policy management software, PetScreening™ helps housing providers manage residents’ pets and assistance animals for free while generating opportunities for pet-related revenue. The digital screening platform standardizes risk assessment for household pets by providing a digital Pet Profile and FIDO Score for each pet screened. PetScreening also streamlines the assistance animal accommodation request review process while following HUD guidelines, and it helps limit unauthorized pets. The platform seamlessly integrates with third-party software such as Yardi, OneSite, Entrata, MRI, ResMan, Rent Manager, Appfolio, Buildium and many more. As a fast-growing innovator in the rental housing technology space, PetScreening has received multiple awards and honors in recent years, including recognition from the Inc. 5000, Deloitte’s 2023 Technology Fast 500, the NC TECH Awards and the Charlotte Business Journal’s Fast 50. For more information, visit www.petscreening.com. SOURCE PetScreening.com

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by Carole VanSickle Ellis
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So Much More Than Meets the Eye By Carole VanSickle Ellis It all started when Lowell Misener fell down the stairs and found himself lying on the floor, looking at an electrical outlet that was not doing one thing to help him. Misener, who is co-founder of smart-device maker Swidget along with Swidget president and COO Chris Adamson, got up and got to work, ultimately creating the Swidget outlet and Swidget switch, part of a network of future-proof, modular, smart devices designed to do everything from enhancing homeowner health and wellness to conserving energy and preventing costly power drains on rental homes. “We started out just thinking about how to create an outlet that would provide emergency light during a power outage,” Adamson recalled. “What started as a very humble emergency light has evolved into so much more.” Soon, the two were adding elements to their smart, battery-less nightlight-outlets like USB chargers and eventually air quality sensors, motion detectors, and humidity monitors. By 2018, they were winning awards at tech trade shows like CES and being described as “pretty darn awesome” by industry analysts, and by 2019, the company had been recognized as one of the CES “Techlicious Top Picks” for the year. Homeowners, real estate investors, and soon, real estate developers, were all installing Swidget technology in their properties in order to safeguard assets and optimize prevention and performance. Swidget outlets and switches are wired into homes just like any other traditional wiring device. Their smart “Inserts” draw power from the wiring device, making them wireless and battery-less. Their modular format makes them hassle-free and simple to install for anyone seeking a hardware solution or a data aggregator and contextualization tool. “The easiest way to think about Swidget is that we provide actionable insights through data created by these ubiquitous devices in the home,” Adamson said. He continued, “The hardware enables users to make smart decisions for the betterment of their lives about what is going on in the space in which they live and work.” For a property owner who wishes to make it so, Swidget data can be almost entirely comprehensive, running the gamut from when lights are turned on and off to managing air quality and providing security monitoring when the owner is absent. Swidget has recently also evolved into the aging-in-place space, providing monitoring and reporting options for caregivers that can promptly enact alerts and even life-saving contact and safety measures in the event that a senior resident fails to go about their daily routine or forgets to turn off an appliance like the stove. “We are so much more than meets the eye,” Adamson said. “The breadth of what we can cover is very, very wide.” Providing the Means to Fully Informed Decisions Swidget devices started out as highly practical, easy-to-install tools for improving life in any residence, but it was only a matter of time before the data element of the devices emerged as a powerful asset. The amount of data available from the Swidget devices and sensors soon proved valuable in many market verticals. Optimizing this element of the network for verticals like SFR vacant property protection, for example, is a primary function for Cameron Wilson, CEO of Swidget and early angel investor for the group. “I was in the audience during one of the founders’ first pitches to an Angel Investment Group,” Wilson said. “I have a background in the electrical, electrical distribution, connected home, and audio spaces. I thought the Swidget concept was one of the best I had ever seen.” After getting to know Misener and Adamson and investing in the company, Wilson came on as the company CEO in early 2019. “I am responsible for guiding and financing the strategic direction of the company,” Wilson explained. “We are trying to solve some pretty big problems that investors and property owners face using the hardware and the data from that hardware to help make informed decisions.” Not surprisingly, real estate investors were early adopters of Swidget technology, with landlords and fix-and-flip investors quickly realizing the implications of a device that could not only prevent home disasters like fire, mold, and flooding but that could, in Wilson’s words, “report the occurrence of motion in a vacant home, when there should be no motion.” He added, “This usage was a big surprise to us at first because we had not been involved in the property rental market initially. However, it quickly became a top priority to help rental and real estate companies monitor and indicate the status of what each property currently is compared to what it should be, and provide alerts when there are anomalies.” During the lockdowns associated with the COVID-19 pandemic, many property owners adopted self-guided tours in lieu of in-person showings, and this has led to a much higher incidence of rental fraud, squatting and theft in vacant SFR homes. “Through the use of motion sensors and video cameras, we are able to monitor and even collect footage when there is an anomaly and notify the right people to address the issue,” Adamson chimed in. “That is a solution we built out specifically to address the needs of vacant-property owners and it has become part of the overall application of our technologies throughout the life cycle of a property.” Seamless Implementation & Seeking Solutions From the time Misener hit the landing at the bottom of his stairs and glanced over to see the entirely dark outlet that could not support a nightlight thanks to a regional blackout, Swidget’s founders and team members have prioritized seeking solutions to practical issues that may be implemented seamlessly into a resident’s or investor’s life and business. For this reason, many of Swidget’s technology packages are designed with new construction in mind. “We want to offer builders the option to install flexible systems that do not mandate future buyers arrange their lives around their proptech,” said Adamson. “Builders want to offer customers flexibility and custom options for energy savings, smart-home technology,