June Market Pulse

Multifamily Starts: Multifamily starts roared back this month, and got top billing from the daily news outlets, since starts in other areas of housing were anemic. While the numbers don’t differentiate between apartments and condos, it’s likely that most of these starts are rentals, since it’s becoming increasingly difficult to get funding to build condos, especially in markets where many condos sit empty or are being rented.Rent Changes:While the rental component of the Consumer Price Index still hasn’t quite caught up to the overall CPI, it’s getting closer. Of course, it’s the CPI that’s falling, and not the rents that are increasing. The rental component has been holding fairly steady for the past three months, as the rest of the CPI, which includes food and energy, has been rising. Rent may soon seem like a bargain compared to everything else. Interest Rates: The Prime continued to drop—thank you, Mr. Bernanke—and the 10-year Treasury rate rose slightly. The LIBOR stayed relatively stable, with an almost imperceptible rise. But mortgage rates aren’t dropping as fast as these interest rates. Until they do, the large new home and condo inventories remain a problem. Sources for Starts, Rent Changes, Interest Rates: National Association of Home Builders. To comment, contact Keat Foong at kfoong@multi-housingnews.com.