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PROFITS ON HOME SALES REBOUND ACROSS U.S. IN SECOND QUARTER OF 2023 AS HOUSING MARKET REVIVES

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Profit Margins on Typical Sales Nationwide Increase Following Three Quarterly Declines; Investment Returns Rise as Median U.S. Home Price Jumps 10 Percent; Seller Profits Still Down Annually Following Earlier Drop-offs ATTOM, a leading curator of land, property, and real estate data, released its second-quarter 2023 U.S. Home Sales Report, which shows that profit margins on median-priced single-family home and condo sales in the United States increased to 47.7 percent in the second quarter – the first gain in a year. The improvement in typical profit margins, from 43.9 percent in the first quarter of 2023, came amid a rebound in the U.S. housing market that pushed the median nationwide home price up 10 percent quarterly to $350,000. Both the nationwide profit margin and median home price increased after three straight quarterly drop-offs that had begun to reverse a decade-long market boom. However, even as seller fortunes turned around in the second quarter, the typical investment return nationwide did remain below the recent high point of 53.2 percent, recorded a year earlier during the second quarter of 2022. “Just when it looked like the housing market was flattening out, prices spiked again, which pushed seller profits back up to nearly their highest level in the past decade,” said Rob Barber, CEO for ATTOM. “Stable mortgage rates, an ongoing tight supply of homes for sale and the usual Springtime surge in buyer demand appeared to have combined to halt the downturn we started seeing a year ago. It’s way too early to predict another long-term price run-up, especially since buying a home is a financial stretch for so many households around the country. But the second-quarter numbers clearly show the market has more steam left in it, and sellers are reaping the benefits.” Gross profits also shot up from the first to the second quarter of 2023. They rose 17 percent on the typical single-family home and condo sale across the country, to $113,000, although they were still down 5 percent annually. The about-face in profits and prices around the U.S. during the second quarter reflected a housing market in flux. After a decade of almost continual increases, home prices dipped across most of the country in the middle of 2022 and continued declining through the first quarter of 2023. The national median price dropped 7 percent during that time as rising home-mortgage rates, high consumer price inflation and a faltering stock market cut into what potential buyers could afford. Prices and profits went back up in the second quarter during the start of the annual buying season, helped along by several forces. They included the nation’s limited supply of homes for sale, mortgage rates that stabilized at around 6.5 percent for a 30-year fixed-rate loan, investment market gains and an easing of inflation. As the 2023 home-buying season continues, the prospect of even better seller profits remains in place but will depend heavily on whether any or all of those factors improve or decline. Profit margins grow quarterly in two-thirds of U.S. but remain down annuallyTypical profit margins – the percent difference between median purchase and resale prices – increased from the first quarter of 2023 to the second quarter of 2023 in 107 (69 percent) of the 156 metropolitan statistical areas around the U.S. with sufficient data to analyze. However, they were still down in 118, or 76 percent, of those metros compared to the second quarter of last year, as the recent improvements were not enough to wipe out losses sustained from the middle of 2022 to the early part of 2023. Metro areas were included if they had sufficient population and at least 1,000 single-family home and condo sales in the second quarter of 2023. The biggest quarterly increases in typical profit margins came in the metro areas of Barnstable, MA (margin up from 47 percent in the first quarter of 2023 to 69.2 percent in the second quarter of 2023); Fort Wayne, IN (up from 46.7 percent to 65.5 percent); Augusta, GA (up from 45.7 percent to 64.1 percent); Rochester, NY (up from 50.9 percent to 68 percent) and Charleston, SC (up from 37.7 percent to 52 percent). Aside from Rochester, the biggest quarterly profit-margin increases in metro areas with a population of at least 1 million in the second quarter of 2023 were in Grand Rapids, MI (return up from 63.9 percent to 76.5 percent); Raleigh, NC (up from 35.8 percent to 47.7 percent), Hartford, CT (up from 38.5 percent to 50.1 percent) and San Diego, CA (up from 45.3 percent to 56.7 percent). Typical profit margins decreased quarterly in just 49 of the 156 metro areas analyzed (31 percent). The biggest quarterly decreases were in Scranton, PA (margin down from 86.9 percent in the first quarter of 2023 to 70.2 percent in the second quarter of 2023); Hilo, HI (down from 101.5 percent to 86.7 percent); Detroit, MI (down from 90 percent to 76 percent); Spartanburg, SC (down from 60.6 percent to 46.6 percent) and Flint, MI (down from 91.6 percent to 80.5 percent). Aside from Detroit, the largest quarterly decreases in profit margins among metro areas with a population of at least 1 million came in Pittsburgh, PA (down from 50.9 percent to 40.2 percent); Buffalo, NY (down from 70.9 percent to 61.5 percent); Indianapolis, IN (down from 48.7 percent to 40.4 percent) and Honolulu, HI (down from 47.1 percent to 41.1 percent). Metro areas with a population of at least 1 million where typical profits remained down the most annually included Austin, TX (margin down from 80.3 percent in the second quarter of 2022 to 47.2 percent in the second quarter of 2023), San Francisco, CA (down from 85.1 percent to 59.4 percent); Phoenix, AZ (down from 75.8 percent to 51.6 percent); Salt Lake City, UT (down from 69.3 percent to 46.4 percent) and Las Vegas, NV (down from 66.5 percent to 46.5 percent). Raw profits up in almost 90 percent of housing marketsProfits on median-priced home sales nationwide, measured in raw dollars, increased from $96,573 in the first quarter of 2023 to $113,000 in the second quarter, a 17 percent gain. Typical raw profits went up quarterly in 137, or 88 percent, of the metro areas analyzed for this report. Annually, however, raw profits remained down 4.6 percent from a record high of $118,400 in the second quarter of 2022. They dropped

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Cortland, a vertically integrated, multifamily real estate investment, development, and management company, announced it has appointed Juan Bueno President of Operations to support the firm’s operating platform. In this newly created role, Bueno will oversee a variety of critical functions, including Operations and Facilities, Analytics, Revenue, Talent, Marketing, Communications, and Resident Experience. In partnership with these teams, he will lead Cortland’s transformational pursuit of a modernized operations and service delivery platform that enables a consistent, personalized, high-quality customer and associate experience. “I am thrilled to welcome Juan to lead the next step in Cortland’s evolution and accelerate our commitment to providing a level of hospitality that creates an unrivaled living experience,” CEO Steven DeFrancis said. “Given his significant experience in the consumer and real estate industries, we look forward to seeing the positive impact Juan will have on our company and our residents.” Most recently, Bueno served as U.S. President for Avison Young, where he led the transformation of the firm’s business approach and organizational structure, spearheaded corporate acquisitions to grow the company, and developed the company’s 5-year strategic growth plan. Prior to that, Bueno was Vice President of Sales for Home Depot Pro, where he led more than 2,100 associates across the company’s four business units (Multifamily, Renovator, Institutional, and Specialty Trades). He also spent more than 15 years in management consulting, including more than a decade with McKinsey & Company. “I am thrilled to have the opportunity to join this first-rate company and work with a market-leading group of professionals,” Bueno said. “By leveraging the strength of a vertically integrated platform, our service-oriented culture and a clear focus on resident experience, Cortland is poised for continued growth in the coming years.” About Cortland:Cortland is a vertically integrated, multifamily real estate investment, development, and management company focused on delivering resident-centric, hospitality-driven apartment living experiences. Headquartered in Atlanta, Cortland manages and is invested in, directly or indirectly, over 250 apartment communities comprised of over 80,000 homes in the US with regional offices in Charlotte, Dallas, Denver, Houston, Orlando, and Tampa. Cortland has significant experience in acquiring, developing, renovating, owning, and operating multifamily communities, leveraging the services of its construction, design, and property, asset, and investment management affiliates. Internationally, Cortland maintains a management and development platform in the UK. SOURCE Cortland Author admin View all posts

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Transactions Pull Back Further Due to Rising Cost of Capital Apartment market conditions continued to weaken in the National Multifamily Housing Council’s (NMHC’s) Quarterly Survey of Apartment Market Conditions for July 2023, as the Market Tightness (26), Sales Volume (40), Equity Financing (22) and Debt Financing (18) indexes all came in well below the breakeven level (50). “Both debt and equity capital continue to pull back from the apartment market amidst an environment of rising interest rates and slowing rent growth,” noted NMHC’s Vice President of Research, Caitlin Sugrue Walter. “As a result, transaction volume fell for the fifth consecutive quarter, with current apartment owners unwilling to offer the lower prices buyers deem necessary to compensate for this diminished economic outlook.” “Yet, as the Federal Reserve nears the end of its tightening cycle, a small but growing share of respondents are finally starting to report a pickup in apartment deal flow.” About the Survey: The July 2023 Quarterly Survey of Apartment Market Conditions was conducted from July 10-17, 2023. 88 CEOs and other senior executives of apartment-related firms nationwide responded. Contacts Colin Dunn202/974-2370cpdunn@nmhc.org Author admin View all posts

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Limited Supply of Homes for Sale Boosts Prices, New Home Construction While the latest data on inflation has provided reason for optimism, less favorable base effects are likely to slow further progress in reducing annual inflation to the preferred 2-percent target, according to the July 2023 commentary from the Fannie Mae (OTCQB: FNMA) Economic and Strategic Research (ESR) Group. Given the low rate of productivity gains, wage growth appears to remain too high for inflation to near its target rate anytime soon, and so the ESR Group is forecasting another rate hike later this month and even tighter monetary policy through the end of the year. The ESR Group expects the Consumer Price Index, on an annual basis, to end the year around 3.1 percent, with the core index around 4.3 percent. Following an unusually large upward revision to first quarter 2023 gross domestic product, this month the ESR Group upgraded its expectations for economic growth in 2023 by a full percentage point to 1.1%. However, while noting that the probability of a “soft landing” may have increased of late, the ESR Group continues to expect a modest recession beginning in the fourth quarter of 2023 or the first quarter of 2024. An extremely limited number of existing homes available for sale continues to be the defining feature of today’s housing market, according to the ESR Group. While total home sales remain near the lowest annual level since 2009, this is not due to lack of demand. Rather, the ongoing lack of inventory, the extent of which exceeded the ESR Group’s earlier expectations, has resulted in significantly stronger home price appreciation than previously anticipated. Dynamics in the existing sales market have been highly supportive of new construction, though, and the ESR Group has significantly upgraded its single-family starts forecast. Still, given the ESR Group’s expectation of slowing economic activity through the end of the year and into 2024, it continues to anticipate slowing home price growth and a slower pace of starts in 2024. “The Fed’s policy tightening in an effort to quell inflation is probably close to finished, although their guidance is really more current than forward, and incoming data will be determinant,” said Doug Duncan, Senior Vice President and Chief Economist, Fannie Mae. “The decline in headline inflation is encouraging, but year-over-year measures will work against further progress in the second half of 2023. Thus, we expect the Federal Reserve will stick to ‘higher-for-longer’ policy after one or two more quarter-point increases, until they conclude that the core inflation rate is sustainably at their 2-percent target. Putting aside any temporary volatility, we expect mortgage rates to stay higher as well. While spreads have come in a bit recently, they remain well above longer-term levels and that means rates for consumers will likely stay elevated.” Duncan continued: “We began discussing our expectations of a supply shortage in late 2014, and it remains front and center in the housing market in 2023. The supply of existing homes is near the 2009 crisis low, and it’s showing no signs of easing. This puts the onus on homebuilders and can be seen in the construction data. There is uncertainty about the real financial capability of households enabling continued support for the economy and housing. Estimates of ‘excess saving’ vary widely in accordance with what is assumed to be a ‘normal’ saving rate. The recent difficulties in the banking sector have led to some credit constraint, usually a harbinger of slowdown in economic activity. As we noted in our April 2022 forecast, whether there is a mild recession (our base case) or a soft landing, the supply issues in housing will provide a downside cushion for economic activity. That is playing out quite close to forecast on existing homes, but new construction has been even more supportive than we expected.” Visit the Economic & Strategic Research site at fanniemae.com to read the full July 2023 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 & Strategic Research Group, please click here. About Fannie MaeFannie Mae advances equitable and sustainable access to homeownership and quality, affordable rental housing for millions of people across America. We enable the 30-year fixed-rate mortgage and drive responsible innovation to make homebuying and renting easier, fairer, and more accessible. To learn more, visit:fanniemae.com | Twitter | Facebook | LinkedIn | Instagram | YouTube | Blog Author admin View all posts

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Elevated mortgage rates are cutting into homebuyers’ budgets. But this week’s inflation report—which shows that consumer prices are cooling quickly—provides a glimmer of hope that mortgage rates could gradually start to come down. The median U.S. home-sale price rose 1.5% from a year earlier during the four weeks ending July 9, the first increase in nearly five months. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Average weekly mortgage rates are at their highest level since November 2022, bringing the typical homebuyer’s monthly payment to a near-record-high of $2,627. To look at the hit on affordability another way, a homebuyer on a $3,000 monthly budget can afford a $450,000 home with today’s average rate. That buyer has lost $30,000 in purchasing power since February, when they could have bought a $480,000 home with that month’s average rate of around 6%. The drop is more extreme when compared to a year ago, when a $3,000 monthly budget would have bought a $510,000 home at a rate of about 5.3%. Prices are rising despite relatively low demand because there are so few homes for sale. New listings are down 27% year over year, the biggest drop since the start of the pandemic, and the total number of homes on the market is down 14%, the biggest drop since March 2022. That’s mostly because potential sellers are locked in by low rates; nearly all homeowners have a rate below 6%. On the bright side, this week’s economic news provides a glimmer of hope for the housing market. The latest consumer-price index report shows that inflation cooled more than expected in June, largely because it has started reflecting months of cooling housing costs. “This month’s inflation report is likely to bring mortgage rates down a bit from their recent highs. It shows that the Fed’s interest-rate hikes are working and increases the chance they’ll only hike rates one more time this year,” said Redfin Economic Research Lead Chen Zhao. “Because elevated mortgage rates are responsible for both of today’s major homebuying challenges—high monthly housing payments and low inventory—any decline is welcome news for buyers. But even though rates will come down slightly, they’ll likely remain well above 6% until the Fed sees several more months of inflation readings closer to their target.” Leading indicators of homebuying activity: Key housing market takeaways for 400+ U.S. metro areas: Unless otherwise noted, this data covers the four-week period ending July 9. Redfin’s weekly housing market data goes back through 2015. For bullets that include metro-level breakdowns, Redfin analyzed the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy. To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-home-prices-rise-first-time-five-months Contacts Redfin Journalist Services:Kenneth Applewhaite, 206-588-6863press@redfin.com Author admin View all posts

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Anchor Loans, the nation’s leading provider of financing to residential real estate developers, builders and entrepreneurs, announced that Jim Fraser has joined the company as Chief Operating Officer. In this role, Fraser will be responsible for the customer experience that Anchor delivers as well as the day-to-day operations of the company. He will also take the lead in expanding Anchor’s homebuilder and build-to-rent (BTR) finance programs. Fraser joins Anchor from Built Technologies, Inc, a leading provider of construction-finance software, where he was Senior Vice President for Commercial Real Estate Lending Solutions. Prior to joining Built, he was an independent advisor to the platform’s co-founders and venture capital providers. Over his 30-year career, Fraser has held a number of senior positions in commercial and mortgage lending. He was Executive Vice President of Commercial Lending at Axos Bank where he was responsible for a $5-billion commercial lending and equipment leasing operation. Previously, he was a Senior Vice President at Banc of California where be managed a $500-million bridge/construction loan portfolio. For more than 10 years, Fraser headed IndyMac’s residential construction lending division with more than 400 employees in five regional centers. “Over the course of his career, Jim has consistently demonstrated his ability to build relationships, grow and manage sustainable businesses, and create value through all economic cycles,” said Rayman Mathoda, Anchor Loans’ Chief Executive Officer. “His deep experience within the construction and homebuilding sectors will further accelerate Anchor’s presence in those markets and particularly within the build to rent space which is experiencing significant growth. Playing a bigger role in financing this growing sector will require talented leadership and scalable operations. Bringing Jim on board gives Anchor a significant advantage in both of these critical areas. Having known Jim for almost 20 years at multiple phases of his career, I’m confident that he will be an excellent addition to our leadership team, helping advance our customer and people-focused culture so we can deliver an exceptional customer and employee experience – the best path to market leadership.” “Anchor Loans is in a unique position to help residential developers navigate the intersection between the long-term need for housing and current credit market disruptions,” said Fraser. “This opportunity, the company’s 25-year heritage and Ray’s vision for the future are what attracted me to Anchor. I’m looking forward to working with Ray and the seasoned team at Anchor to develop new functions, processes and technology to accelerate production growth and build customer-centric operations.” Anchor Loans has experienced significant growth over the last several years, completing 2022 with a record $2 billion in originations. As part of its growth and expansion plans, Anchor has recently expanded both its senior leadership team and its national sales organization. About Anchor LoansAnchor Loans is the nation’s largest private direct lender to real estate investors offering a full range of fix and flip, ground-up construction and rental financing. For 25 years, Anchor Loans has built deep client relationships by being a reliable source of funding and delivering an outstanding customer experience, which is why repeat customers are its largest source of volume and referrals. To date, Anchor Loans has originated more than $13 billion in funding. For more information, please visit https://www.anchorloans.com SOURCE Anchor Loans Author admin View all posts