According to the latest ICE Mortgage Monitor, foreclosure starts hit an 11-month high, but remain below pre-pandemic levels.  In addition, the number of homes for sale in 2024 increased 22% leaving for-sale inventory at its best level since mid-2020.  The ICE Mortgage Monitor provides a view of the current mortgage market, including loan-level performance, home price trends data, secondary market metrics and public records.

“While the share of homeowners past due on mortgage payments remains low by historical standards, we expect mortgage performance to become a growing topic of conversation in 2025, especially among FHA and VA mortgages.”

According to the latest Yardi Matrix Multifamily Report, multifamily rents are off to a positive start for 2025 with the average U.S. advertised rent increasing $3 nationally in January to $1,746. Year-over-year rent growth was up 20 basis points to 0.8%.

“Multifamily got the year rolling in a positive direction, with rents in January breaking a six-month negative growth streak….[HOWEVER]…One of the questions the industry faces in 2025 is whether demand will repeat 2024’s red-hot level.”

Rentcafe says office-to-apartment conversions are surging in popularity and predict that 2025 will reach a record-breaking milestone of almost 71k units in the pipeline.  In addition they this trend reflects a shift toward sustainable, community-focused urban spaces that cater to the evolving lifestyles and priorities of modern American cities.  Indeed…

“While the volume of office-to-apartments conversions is growing, indicating increased interest in this type of retrofitting, the carryover of pending projects from one year to another is quite large. This suggests that other factors like conversion feasibility, construction costs, and local incentives come into play.”

Some key points:

• The number of apartments set to be converted from office spaces has skyrocketed from 23,100 in 2022 to a record-breaking 70,700 in 2025.
• Office conversions now make up almost 42% of apartments in future adaptive reuse projects.
• Adaptive reuse of newer buildings (built between the 1990s and 2010s) is on the rise.

The Wall Street Journal (reposted on Realtor.com) says aging baby boomers are about to rekindle the senior housing market.  They say that while senior housing has been one of the biggest disappointments for commercial real-estate investors, thanks to millions of aging baby boomers, that may be about to change.  In fact, they point out that the oldest of the baby boomers turn 80 in less than a year.

The sector is expected to move from its former glut to a shortage in the next five years. More than 560,000 new units are needed to meet all the demand by 2030, but only 191,000 will be added at current development rates, according to data service NIC MAP.

“We’ve never had a population pyramid that looks like this,” said Arick Morton, chief executive of NIC MAP. “The senior housing industry would need to develop twice as many units as it has ever developed in any single calendar year every year to keep up.”

  A new report from the NAHB’s Eye on Housing shows that house prices posted modest annual growth for Q3, 2024, however for the past two quarters this price growth has slowed.  The NAHB says this has occurred while elevated mortgage rates have kept many potential home buyers away – even with additional inventory.

"Between the third quarter of 2023 and the third quarter of 2024, all 50 states and the District of Columbia had positive house price appreciation, ranging from 1.2% to 8.8%. New Jersey and Connecticut topped the house price appreciation list with an 8.8% gain."

As the 2025 predictions roll in, the researchers at Realtor.com says mortgage rates will continue to average above 6% and home prices will keep rising. In addition they say the supply of homes for sale will continue to improve as well as new-home construction.

“This past year brought us a surprising upward trend in home price growth despite the persistence of high mortgage rates and rising inventory,” Realtor.com economists wrote. “Mortgage rates are expected to keep mortgage payments essentially unchanged in 2025 despite continued home price growth."

 

 

The U.S. government is reporting that total construction spending in October, 2024 was at a seasonally adjusted annual rate of $2,174 billion, which is 0.4% higher than September’s revised number.  However, October’s revised estimate is 5% higher than one year ago.  Residential construction came in at a seasonally adjusted annual rate of $934 billion in October, which is 1.5% higher than September’s revised estimate.

The Federal Housing Finance Agency (FHFA) announced their conforming loan limit values (CLLs) for mortgages acquired by Fannie Mae and Freddie Mac (the Enterprises) for 2025.  The FHFA says that in most of the US, the 2025 CLL value for one-unit properties will be $806,500, an increase of $39,950 (or 5.2%) from 2024.  The Housing and Economic Recovery Act (HERA) requires FHFA to adjust the Enterprises’ baseline CLL value each year to reflect the change in the average U.S. home price.

A new report from the National Association of Realtors says with rapidly changing buyer preferences and abilities, there has been a lot of migration within the United States over the past few years.  They point out that data show that southern states such as Florida, Texas, and the Carolinas have been big winners in these domestic migration patterns, largely led by more affordable conditions and opportunities.  In fact, 46% of respondents’ clients moved to the South, 25% moved to the West, 18% moved to the Midwest, and 11% moved to the Northeast.  Indeed….

Millions of Americans move and migrate throughout the nation, and this has been exacerbated by the surge of remote work and current affordability issues in the market.