This is a narration of our weekly Rent and Operating Trends Report.
In a rare interview on Sunday evening, Fed Chair Jerome Powell explained on 60 Minutes that the Fed is now planning its first interest rate cut since 2020. Most economists expected rate cuts in 2024, however it is abnormal for the Fed Chair to speak publicly on the matter, especially outside of a policy meeting press conference. While Powell stopped short of estimating when the first cut would come, he inferred that inflation is now under control and he expects annual inflation figures to continue declining, as lagging components, such as housing costs, begin to hit the inflation data. I believe we will see the first rate cut in late Q2 followed by two additional cuts in the second half of the year, but those decisions will be data dependent as we progress through the year. However, it is now clear that the Fed will be cutting rates and Powell took a demonstrative step toward transparency, as he shared his views with the public.
Multifamily performance had another strong week last week with all key metrics increasing from the week prior. Occupancy and traffic led the way once again, and average traffic nationwide is above 7 tours per property, while occupancy climbed above 93.7%. Rent, RevPAU and leases signed all increased modestly as well. Demand appears strong as we move into February, and another steady month should set up nicely for the 2024 leasing season.
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