This is a narration of our weekly Rent and Operating Trends Report.
It was a fairly quiet week in the U.S. economy as the Thanksgiving holiday limited data releases last week. Existing trends continued from the prior week as the 10-year treasury continued to drift lower. The yield on the 10-year is now 4.42%, nearly 60 basis points below its recent peak in mid-October. Oil prices continue to fall, with WTI Crude Oil trading around $75 per barrel, down from $93 in recent months. The slowdown in oil prices will help keep inflation at bay and potentially allow the Fed to end its monetary tightening. GDP will be released this week and November job gains will be reported next week. Key inflation indicators will also be announced prior to the Fed’s next interest rate announcement.
Multifamily fundamentals have not deviated from their slow decline. Leading indicators were mostly flat last week, while lagging indicators continued to fall. The recent speculation that interest rate increases may be finished has spurred some excitement in the transaction market, as buyers and sellers are beginning to come together on deal terms. Transaction activity has not increased meaningfully yet, but the combination of maturing loans, expiring rate caps and stability in the interest rate market will likely bring an uptick in transaction activity.
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