Stock markets fell after the latest CPI report showed higher-then-expected inflation, but the nominal increase—0.1% month-over-month—is relatively low. More significantly, the CPI shows that rental housing has become one of the most powerful drivers of inflation. Notably, market rate apartment rents remain below the 30% unaffordability threshold, and elevated mortgage rates have kept rental housing as a more affordable option than buying a home, suggesting that there may be room for further growth.

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DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.

Apartment industry professionals expect continued pressure from interest rates and inflation through the rest of the year, with many expecting mild cap rate expansion in the near future. That being said, the multifamily market's strong fundamentals and history of stable performance amidst economic volatility leaves open the possibility of greater investor interest, especially in the wake of such strong rent growth in 2021 and 2022.

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DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. The opportunities referenced in this podcast do not represent an offer to invest.

Despite continued turbulence in the economy, persistent trends in the multifamily market and commercial real estate are sharpening many projections for 2022 and 2023. A recently-published cap rate survey further highlights the effect that the Federal Reserve's interest rate regime has had on CRE markets, and several recent multifamily reports show how the higher-performing apartment markets of 2021 have softened in 2022, with renter and investor demand increasing in smaller secondary/tertiary markets.

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Sales volumes for single family homes have decreased significantly due to increasing mortgage rates, but with the slowdown so strongly linked to interest rate hikes, there is no evidence that would suggest an implosion or collapse. Housing demand remains strong, but the sharp increases in average mortgage payments have priced a growing number of people out of buying a home. As reports published this week note, the apartment market can expect continued demand from would-be homebuyers, and while multifamily development continues at elevated levels, longer construction timelines and persistent materials and labor problems will make it difficult to substantially impact demand.  

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DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest.

Adam Neumann was ousted as CEO of the office-sharing company he founded, but Andreessen Horowitz's $350 million investment in Neumann's multifamily-focused venture, the largest first-round investment in Andreessen Horowitz's history, is a substantial second chance for Neumann. It is not surprising that more investors are entering the apartment investment market, as multiple reports published this week continue to illustrate its resilience and elevated rent growth, but Andreessen's insistence that the rental market is "soulless" and in need of ground-up transformation ignores the significant progress and already-existing technologies in the multifamily industry that continue to improve the lives of renters and their apartment communities.

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DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. The opportunities referenced in this podcast do not represent an offer to invest.

Last week's jobs numbers revealed a stronger-than-expected labor market, and the just-released CPI report shows that inflation has leveled off and could be heading down. The economic anxieties of 2022, however, will not be so easily dispelled. Wage growth from the strong jobs market has the potential to re-ignite the rising prices of previous months, and apartment rents are becoming an increasingly powerful driver of inflation. The recent reports on employment and inflation are clearly good news, and for multifamily market specifically, its historic resilience during inflationary periods, along with recent projections of consistent elevated rent growth for the next several years, are positive signs for apartment investors.

For the latest multifamily news from across the internet, check out the Gray Report website: https://www.grayreport.com/

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DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. The opportunities referenced in this podcast do not represent an offer to invest.

In the face of mounting anxieties about the broader economy, several reports were published this week that analyze the long-term and short-term risks for the multifamily market, from consumer sentiment, to apartment performance during a recession, to the prospect of lower population growth. In this episode we discuss the likelihood of these risks, how the multifamily market might perform if these risks were realized, and what investors should do to account for these possibilities.

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DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. The opportunities referenced in this podcast do not represent an offer to invest.

Along with negative GDP numbers for Q2, the second consecutive 0.75% rate increase from the Federal Reserve comes as reports on decreased home sales show the impact of previous rate hikes. In the multifamily market, higher cost of leverage is expected to continue to further impact cap rates and asset prices as more apartment buyers are unable to make their investment plans work in a higher interest rate environment.

For the latest multifamily news from across the internet, check out the Gray Report website: https://www.grayreport.com/

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DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. The opportunities referenced in this podcast do not represent an offer to invest.

As rising interest rates and inflation do little to resolve the housing affordability crisis, anxious stories about excessively high rents are not difficult to find. Recent reporting on renter income trends and household formation, however, suggests that there is room for apartment rents to grow, especially among lifestyle and middle-income renters at class A and B properties.

For the latest multifamily news from across the internet, check out the Gray Report website: https://www.grayreport.com/

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DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. The opportunities referenced in this podcast do not represent an offer to invest.

A certain strain of anxiety has carried forward from the bigger-than-expected employment numbers in last week’s jobs report to the inflation numbers in this week’s consumer price index. This heated economy is expected to bring an additional 75+ basis-point interest rate increase from the Federal Reserve, and within this heightened economic atmosphere, apartment assets have taken an increasingly influential role as rent growth impacts inflation.

For the latest multifamily news from across the internet, check out the Gray Report website: https://www.grayreport.com/

Sign up for our free multifamily newsletter here: https://www.graycapitalllc.com/newsletter/

DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. The opportunities referenced in this podcast do not represent an offer to invest.