Newsletter – Page 76

Home Prices Post Small Increase as Mortgage-Rate Drop Attracts Buyers

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An increase in home searches and tours at the end of 2022 is starting to translate into purchases as mortgage rates fall. Mortgage applications are up 25%, and the slowdown in pending sales is easing. The median U.S. home-sale price increased 0.9% from a year earlier to $350,250 during the four weeks ending January 15, the biggest increase in a month, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Prices remain elevated because buyer activity has started to pick up as mortgage rates decline due to slowing inflation. Average mortgage rates dropped to 6.15% during the week ending January 19, their lowest level since September. Pending home sales fell 29% year over year—a significant decline, but the first sub-30% drop in three months. Mortgage-purchase applications rose 25% from the week before during the week ending January 13, a jump that’s likely to lead to more pending sales in the coming months. As demand inches back, some homeowners are less reluctant to sell. New listings of homes for sale fell 20% year over year during the four weeks ending January 15—but that’s the smallest decline in two months. “The people who started browsing homes online and scheduling house tours at the end of 2022 are now turning into actual homebuyers,” said Redfin Deputy Chief Economist Taylor Marr. “Low competition, falling mortgage rates and seller concessions are bringing some buyers back to the market. That’s helping keep national home prices afloat, which is one bright spot for sellers. But many buyers are still sitting on the sidelines and demand could dip back down if inflation declines slower than expected or mortgage rates rise again.” Home prices fell from a year earlier in 18 of the 50 most populous U.S. metros Home-sale prices fell year over year in 18 of the 50 most populous U.S. metros during the four weeks ending January 15. By comparison, 20 metros saw a price decline during the prior four-week period and 11 metros saw price declines a month earlier. Prices fell 10.1% year over year in San Francisco, 6.7% in San Jose, 5.5% in Austin, 4.3% in Detroit, 3.8% in Seattle, 3.7% in Phoenix, 3.4% in Sacramento, 3.1% in San Diego, 2.8% in Anaheim, CA, 2.5% in Chicago, 2.4% in Los Angeles, 2.3% in Oakland, CA and 2.2% in Boston. They fell less than 2% in Riverside, CA, Portland, OR, New York, Newark, NJ, and Las Vegas. 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 January 15. Redfin’s weekly housing market data goes back through 2015. To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-home-prices-increase-some-buyers-return

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Rents Rising Faster Than Home Prices in Almost Half the U.S.; Both Renting and Owning Unaffordable for Average Workers Throughout the Country; Renting Still More Manageable in Vast Majority of Markets ATTOM, a leading curator of real estate data nationwide for land and property data, released its 2023 Rental Affordability Report, which shows that the average three-bedroom rent is more affordable than owning a comparably sized median-priced home in 210, or 95 percent, of the 222 U.S. counties analyzed for the report. Both renting and owning a three-bedroom home are significant financial burdens for households around the U.S., consuming more than one-third of average wages in most major housing markets. But average rents still require a significantly smaller portion of wages than major home-ownership expenses on three-bedroom properties. That gap has emerged even as rents have risen faster than home prices over the past year in roughly half the nation. The analysis for this report incorporated 2023 rental prices and 2022 home prices, collected from ATTOM’s nationwide property database, as well as publicly recorded sales deed data licensed by ATTOM. Those two data sources were combined with average wage figures from the Bureau of Labor Statistics. “What a difference a year makes,” said Rick Sharga, executive vice president of market intelligence for ATTOM. “Last year our study concluded that it was more affordable to own than to rent in 60 percent of the markets analyzed. But with mortgage rates doubling, monthly payments for new homeowners rose by 45-50 percent compared to a year ago, even though home price appreciation has slowed down dramatically. This has made renter more affordable in the majority of markets, despite rental rates continuing to rise over the past year.” The report shows that renting is more affordable in most of the country following a year of mixed market patterns around the country, flowing from a rapidly changing housing market. Average three-bedroom rents climbed more than median sales prices on single-family homes in 46 percent of the markets analyzed. That happened at a time when a decade-long run of price spikes slowed considerably across the U.S., amid rising mortgage rates, high inflation, a declining stock market and other factors that cut into what potential buyers could afford. Still, rents didn’t go up fast enough to keep them from being the more financially viable option for workers earning average local wages in most markets. Average rents commonly consume a smaller portion of average wages than major home ownership by anywhere from 5 to 30 percentage points. The patterns hold throughout the country, but are most pronounced in the most populous urban markets. Rents rising faster than home prices in half the nation Average rents for three-bedroom homes are increasing more than median prices for single-family homes in 103 of the 222 counties analyzed in this report (46 percent). Counties were included in the report if they had a population of 100,000 or more, at least 100 sales from January through November of 2022, and sufficient data. The most populous counties where three-bedroom rents are rising faster than median sales prices for single-family homes are Cook County (Chicago), IL; San Diego County, CA; Orange County, CA (outside Los Angeles); Kings County (Brooklyn), NY, and Miami-Dade County, FL. The largest 119 counties where sales for single-family homes are rising faster than rents are Los Angeles County, CA; Harris County (Houston), TX; Maricopa County (Phoenix), AZ; Dallas County, TX, and Clark County (Las Vegas), NV. Widest affordability gaps between renting and owning in most populous counties Renting the average three-bedroom home is more affordable compared to owning a single-family home in the nation’s largest counties, with populations of at least 1 million. Among 46 counties with a population of at least 1 million included in the report, the biggest gaps are in Honolulu, HI (average three-bedroom rents consume 66 percent of average local wages while single-family home ownership expenses consumes 140 percent); Alameda County (Oakland), CA (47 percent for renting versus 110 percent for owning); Santa Clara County (San Jose), CA (28 percent versus 83 percent); Orange County, CA (outside Los Angeles) (73 percent versus 125 percent) and Contra Costa County, CA (outside San Francisco) (49 percent versus 90 percent). The only county with a population of more than 1 million where it is more affordable to buy than rent is Cook County (Chicago), IL (average rents consume 40 percent of average local wages while home ownership consumes 38 percent). The biggest gaps among counties in the report with populations of less than 1 million are in San Mateo County, CA (outside San Francisco) (average three-bedroom rents consume 39 percent of average local wages while single-family home ownership expenses consumes 103 percent); Alexandria City/County, VA (outside Washington, DC) (46 percent versus 101 percent); Loudoun County, VA (outside Washington, DC) (44 percent versus 97 percent); San Francisco County (41 percent versus 92 percent) and Utah County (Provo), UT (37 percent versus 84 percent). Renting three-bedroom homes difficult for average wage earners, but most affordable in South and Midwest The report shows that renting the typical three-bedroom property requires more than one-third of average local wages in 174 of the 222 counties analyzed for the report (78 percent). Among the 48 markets where average three-bedroom rents require less than one-third of average local wages, 44 are in the Midwest and South. The most affordable counties for renting a 3-bedroom property are Jefferson County (Birmingham), AL (20 percent of average local wages needed to rent); Pulaski County (Little Rock), AR (23 percent); Cuyahoga County (Cleveland), OH (23 percent); Wayne County (Detroit), MI (24 percent) and Summit County (Akron), OH (25 percent). Aside from Cuyahoga and Wayne counties, the most affordable counties for renting, among those with a population of at least 1 million, are St. Louis County, MO (25 percent of average local wages needed to rent); Allegheny County (Pittsburgh), PA (26 percent) and Philadelphia County, PA (26 percent). The least affordable counties for renting are spread through the South, Northeast and West, including Kings County (Brooklyn),

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Sharestates, a leading real estate financial technology (fintech) platform, announced the expansion of its investment offerings to include the “Sharestates Global Varied Term Fund” a Pre-Origination Note Fund (PONF). Sharestates’ PONF will act as a funding vehicle to originate and sell commercial business purpose loans originated and serviced by Sharestates. With a fixed interest rate and 6-, 9-, and 12-month terms, the short duration and unique nature of the PONF will minimize exposure to economic shifts that may otherwise affect underlying real estate’s property values, allowing global investors to participate in commercial lending through fund structures in addition to Sharestates’ historic whole and fractional note offerings. “The Global Varied Term Fund is Sharestates’ solution to a demand that has been brought to the Company by its domestic and international investors”, said Amy Doshi, General Counsel. “The PONF provides a tax efficient legal and corporate structure for global investors to indirectly invest in US-based debt while allowing them to rely on Sharestates expertise in commercial lending and its in-depth underwriting process, greatly reducing international investors barriers to entry.” Since 2013, Sharestates has offered investors first-position Borrower Payment Dependent Notes (BPDNs) associated with single properties or loan portfolios, underwritten by Sharestates, to earn a fixed rate of return. With the launch of Sharestates’ first PONF investors can gain access to a multi-asset exposure fund used to pre-fund first-position mortgages prior to syndicating them on Sharestates’ online platform or selling the loans to institutional whole loan buyers. The PONF will have a fixed interest rate and fixed maturity date, so investors will have minimal exposure to loan maturity. “Investors across the globe have increasingly looked for exposure to real estate debt opportunities due to its attractive yields on a risk-adjusted basis”, said Allen Shayanfekr, Chief Executive Officer. “We’re excited to offer our investors added value with our first PONF in addition to the BPDNs that Sharestates has offered with a track record of less than 1% principal loss since the company was founded.” Sharestates’ new Global Varied Term Fund will offer investors high-yield, risk-adjusted returns, and passive income by investing in a broad range of residential and commercial real estate debt opportunities. To date, Sharestates has funded over $3.5 billion in US real estate loans and returned over $2 billion in principal to investors. “Sharestates’ experience underwriting and servicing BPDNs through successful repayment since 2013 make the company uniquely qualified to offer our investors a PONF”, said Richard Wisniewski, Chief Investment Officer. “Our focus on private debt offers attractive returns compared to the broader credit market, and our ability to bring new opportunities to investors as the market shifts will be key to the company’s growth in 2023 and beyond.” About Sharestates Sharestates is a national private lender focused on non-owner-occupied residential and commercial properties. The company creates customized lending solutions for real estate developers and has successfully funded over $3.5 billion in projects nationwide. Sharestates offers the broadest loan programs available in the market with competitive pricing. Since its founding in 2013, Sharestates has been an important source of private capital to real estate investors nationwide seeking short-term bridge financing for rehabilitation projects and long-term DSCR loans for rental properties. To learn more visit invest.sharestates.com/global-fund

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According to data released as part of the Census Bureau’s 2021 Rental Housing Finance Survey (RHFS), individual owners account for approximately 72.53% of all single-family rental homes in the United States, the largest share of any ownership group. The share of homes owned by individuals in the 2021 survey marked a slight increase from the 2018 survey when individuals owned approximately 72.50% of single-family rental homes. The next largest share of single-family rental homes are held by a collection of partnership and limited liability interests (LPs, LLPs, and LLCs), ownership structures often employed by individuals and small businesses, which account for approximately 14.27%. “Results from the 2021 Rental Housing Finance Survey show that individuals and small, local businesses account for the vast majority – in excess of 85% – of single-family rental homes in the United States. What’s more, the share of single-family rental home ownership by individuals has remained consistent with 2018 levels,” said David Howard, Chief Executive Officer of the National Rental Home Council. “In addition to revealing the hyper-local aspect of single-family rental home ownership, these survey results demonstrate a continuing commitment on the part of individual owners to provide a vital source of quality, affordably-priced rental housing.” Source: Rental Housing Finance Survey, US Census Bureau; https://www.census.gov/programs-surveys/rhfs.html SOURCE National Rental Home Council About NRHC The National Rental Home Council (NRHC) is the nonprofit trade association representing the single-family rental home industry. NRHC members provide families and individuals with access to high-quality, single-family rental homes that contribute to the vitality and vibrancy of neighborhoods and communities. For more information on NRHC or the single-family rental home industry visit www.rentalhomecouncil.org

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Company Launches Modern, Simplified Brand Identity Honoring its Heritage AMH, a leading single-family rental operator and top U.S. homebuilder previously known as American Homes 4 Rent, unveiled a new corporate brand identity that embraces its DNA with a modern outlook. The simplified name and reimagined look and feel represent a commitment to continued innovation, as well as to the company’s original purpose and leadership in powering a better future for American housing. “This year, we celebrate ten years dedicated to simplifying how America lives by delivering professionally managed homes and services that elevate the experience of single-family living,” says David Singelyn, co-founder and chief executive officer of AMH. “Our goal is to make leasing a high-quality home easy, so our residents can focus on what really matters to them in life. Now, we’re simplifying our brand, too, to better reflect our focus on making the home experience easier for our residents.” This branding leverages the company’s rich heritage, people-first employer culture and industry-leading sustainability program, which has earned the organization recent recognitions as one of America’s Most Responsible Companies 2023 by Newsweek and Statista, a 2022 Great Place to Work® and a Top ESG Regional Performer by Sustainalytics. Rooted in extensive third-party consumer research, this year-long rebranding initiative also includes updated resident touchpoints through a simplified digital and mobile experience, including a new user-friendly website and URL: www.amh.com. “Today at AMH, we do much more than just rent homes. We’re reimagining the future of housing while improving people’s everyday lives,” says Bryan Smith, chief operating officer of AMH. “Our new brand reflects our differentiation in the industry through an elevated customer experience and allows us to continue taking on new opportunities to expand our offerings in the service of resident satisfaction.” Going forward, branding will identify the company as AMH, with American Homes 4 Rent remaining its legal name. About AMH AMH, previously known as American Homes 4 Rent, is a leading single-family property owner, leasing operator and build-to-rent developer. We’re an internally managed Maryland real estate investment trust (REIT) focused on acquiring, developing, renovating, leasing and managing homes as rental properties. Our goal is to simplify the experience of leasing a home and deliver peace of mind to households across the country. In recent years, we’ve been named one of Fortune’s 2022 Best Workplaces in Real Estate™, a 2022 Great Place to Work®, a 2022 Top U.S. Homebuilder by Builder100, one of America’s Most Responsible Companies 2023 and America’s Most Trusted Companies 2022 by Newsweek and Statista, and a Top ESG Regional Performer by Sustainalytics. As of September 30, 2022, we owned nearly 59,000 single-family properties in the Southeast, Midwest, Southwest and Mountain West regions of the United States. Additional information about AMH is available on our website at www.amh.com. AMH refers to one or more of American Homes 4 Rent, American Homes 4 Rent, L.P., and their subsidiaries and joint ventures. In certain states, we operate under AMH Living or American Homes 4 Rent. Please see amh.com/dba to learn more.

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Majority expects a decline in global and US economy – and profitability Real estate brokerage leaders are rarely a pessimistic group, yet more than half believe the global economy (63 percent) and the US economy (51 percent) will deteriorate in 2023. That’s according to the new Delta Real Estate Leadership Survey of more than 100 brokerage leaders of firms collectively responsible for more than 60 percent of all transactions last year. “Another bigger takeaway is that the closer to home, the more confident real estate brokerage leaders are about the economy improving over the next 12 months,” explained Michael Minard, CEO and owner of Delta Media Group. Most (72 percent) real estate leaders believe their state economy will stay the same or improve over the next 12 months. An even larger majority (75 percent) believe their local economy will remain the same or improve. The independent study found only 4% of real estate brokerage leaders believe the global economy will improve in 2023. However, many leaders are more bullish on their local economies, as 28% of real estate brokerage leaders believe their local economy will improve, and 25% believe their state economy will improve over the next 12 months. “It’s important to note not a single real estate brokerage leader of the more than 100 professionals surveyed believes the global, US, state, or local economy will ‘improve significantly’ in 2023,” Minard added. The survey also revealed real estate brokerage leaders were split on what they believe will happen to housing demand in their local markets in 2023. About one-third say it will improve, one-third say it will stay the same, and one-third believe it will deteriorate. Only 3% of those surveyed believe their local housing market will decline significantly in 2023. Moreover, the survey gauged the confidence level of real estate brokerage leaders today compared to 12 months ago. The survey shows two in three leaders are less confident than a year ago in the global and US economies. In addition, about one in three are less optimistic about their state and local economies. But, overall, most real estate leaders (59 percent) have unchanged confidence in their state and local economies. More bullish about their own business in 2023 More than half (53 percent) of real estate brokerage leaders see their profitability decreasing this year, and their total transactions dropping from 2022. “What is surprising is despite the fact many real estate brokerage leaders believe their profitability and transaction count will decline in 2023, 56% believe their brokerage will increase their local market share,” said Minard, adding “They clearly see opportunity in a chaotic market.” About the survey The independent research, conducted in December 2022 by Delta Media Group, one of America’s largest technology solutions providers for real estate brokerages, collected responses from more than 100 broker-owners and top brokerage executives representing firms that were responsible for more than 60 percent of US residential real estate transactions last year. Nearly one in five (18 percent) of the leaders responding manage brokerages with more than $3 billion to over $10 billion in projected 2022 transactions; 23 percent manage brokerages with $1 billion to $3 billion; 21 percent manage brokerages with $501 to $999 million, and 38 percent manage brokerages with $500 million or less in total transactions. Delta survey participants included leaders from all sizes of brokerages, with nearly one in 10 (9 percent) managing brokerages with 20 agents or fewer; slightly more than one in four leaders (26 percent) managing brokerages with 21 to 100 agents; 41 percent of leaders operating brokerages with 101 to 500 agents; 9 percent of leaders managing brokerages with 501 to 1,000 agents; and 15 percent of leaders operating brokerages with more than 1,000 agents. Forty-three percent of the respondents are 60 years or older; 34 percent are 50 to 59 years old; 20 percent are 40-49 years old; and 3 percent are 31 to 39 years old. In addition, 77 percent are male, 21 percent are female, and 2 percent selected “not listed.” SOURCE Delta Media