Sky-High Housing Costs Boost Rental Home Construction
May 15, 2024
In this edition of Above the Line, we explore the surge in construction of rental homes as developers capitalize on high housing costs and elevated mortgage rates.
Last year saw a 39% increase in the completion of rental homes compared to 2022, marking a historic high. This trend is most noticeable in the outer-ring suburbs of cities in Arizona, Texas, and Florida, driven by rapid population and job growth.
Let’s dive in.
Sky-High Housing Costs Propel Construction of Rental Homes
The Wall Street Journal
With the steep increase in home prices and higher mortgage rates, many Americans are finding it increasingly difficult to purchase homes, turning instead to the growing number of rental properties. Developers are responding by building a variety of rental homes, from townhomes to detached houses with large backyards.
CRE Sales Transaction Showing Signs of Recovery
Moody’s Analytics CRE
A new report highlights a recovery in CRE sales transactions, with significant increases noted especially in sales above $50 million. This uptick suggests a growing investor confidence despite current interest rate challenges.
Goldman Raises $3.6 Billion for New Real Estate Credit Fund
Yahoo Finance
Goldman Sachs has successfully raised $3.6 billion for its latest real estate credit fund, aiming to bridge the gap in real estate debt financing exacerbated by the withdrawal of traditional banks from the market.