Mortgage rates drop after SVB collapse

March 14, 2023

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What's important to know:

The average 30-year mortgage rate dropped to 6.57% on Monday, following Silicon Valley Bank’s collapse that has rattled markets.
The unexpected drop in rates could offer an opening for homebuyers and homeowners waiting to lock in a lower rate.
The decline in rates might not be enough to convince some homebuyers to come back into the market given lingering affordability concerns.
The drop could give buyers at least 5% of their purchasing power back, but experts remain uncertain how long the dip will last.
While the near-term outlook is for mortgage rates to drop, the overall picture still isn't all that bright rate-wise.

Rent Growth Takes a Chill Pill

Rent growth has slowed for the ninth consecutive month
Despite the slowdown in demand for new leases and high housing costs, rents are up 16.5% from last year
Inflation and high construction costs have made landlords hesitant to drop prices
Landlords may instead offer other concessions, such as free parking or discounted security deposits
Rent growth has slowed due to a surge in apartment construction and a slowdown in household formation.

According to a recent Yardi RentCafe analysis, the hottest demand for multifamily rental space is shifting from the southeast to the northeast, with North Jersey leading as the most competitive rental market in the US.
Metrics such as the number of days apartments were vacant, occupancy percentage, number of prospective renters competing for a given apartment, percentage of lease renewals, and share of new apartments completed were used to determine the competitiveness score.
Currently, New Jersey's competitiveness score is 115, with Jersey City and Newark being relatively affordable and desirable locations for renters.
Competition for multifamily units has also increased in smaller geographic locations, such as Portland, ME and White Plains, NY.
The report suggests that the shift in demand for rental space from the south and west to the northeast could be attributed to factors such as increased job opportunities, lifestyle preferences, and the desire for more spacious living.

Landmark Properties has 22 multifamily and student housing projects in its development pipeline, with a total estimated value of approximately $4.4 billion.
Two student housing projects are currently under construction near USC, with a combined 716 units set to be added to the inventory.
Landmark Properties also has student housing projects in development near the University of California, Berkeley, the University of Pennsylvania, and the University of Minnesota.
Newmark’s Co-Head of U.S. Capital Markets and other key executives facilitated the purchase of the 4.4-acre parcel of land for the USC student housing project.
The USC student housing project will include a rooftop deck with a swimming pool, in-unit laundry facilities, gourmet-style kitchens, and high-speed internet, among other amenities.

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