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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 76 August 2024 J O U R N A L with only minor equity adjustments as a consequence of recent slowdowns. According to CoreLogic's Q4 2023 Home- owner Equity Insights data, homeowners in all four locations increased their equi- ty by more than $150,000 between 2019 and 2022, and they all still have more than $100,000 in equity. In the end, it would be an exaggera- tion to suggest that epidemic boomtowns have witnessed anything like a price crash, even though they have had abrupt and severe slowdowns in appreciation over the previous 18 months. Further- more, because of their rapid population increase, these marketplaces were popular before the epidemic, indicating that they had solid fundamentals for long-term price rise. MULTIFAMILY BUILDING PERMITS STALL DESPITE STEADY APART- MENT DEMAND S o far this year, permits have been received by builders to build 13 multifamily housing units for every 10,000 residents in the United States; this is a roughly 30% decrease from the average of 18 for the same periods in 2021-2023. That's according to a new report from Redfin. The study is based on a Redfin examination of data from the United States Census Bureau that covers the first five months of 2024 and the same periods in 2021-2023 for building permits for multifamily units in buildings with five or more units. While the metro sections below cover the 79 U.S. metros with pop- ulations of at least 750,000, national data encompass the whole country. The decline in multifamily building permits is not due to a lack of demand, but rather a decrease in the number of home builders pursuing these permits. Two reasons builders are seeking fewer permits are: Elevated interest rates have made it more expensive to borrow money for construction projects, and there's already a near-record number of new multifamily units hitting the market due to a building boom in recent years, making it difficult for some property owners to find tenants. Less than half (47%) of new apartments that were com- pleted at the end of last year were rented within three months—the lowest share since 2020. The number of multifamily units completed is still at record highs, despite the fact that multifamily building per- mits and starts have drastically decreased and are below their 10-year historical norm. The reason for this is that many of the projects that were started during the pandemic are just now being completed. The amount that rent prices in the United States can rise is limited because of the glut of newly constructed apart- ments, which puts landlords in many lo- cations in competition with one another for renters. Although they are currently at their highest point since 2022, asking rents have increased by less than 1% from a year ago—a far cry from the 18% spike observed during the pandemic. "Prospective renters should be aware that now may be a better time to sign a lease than later," said Sheharyar Bokhari, Senior Economist at Redfin. "Property owners might start jacking up rents again once all of the new apartments hitting the market fill up with tenants and there's no longer so much supply, which could be the case in a year or two." Where Is Multifamily Housing Booming? In Cape Coral, Florida, builders "As more people move to the suburbs of large cities and employment centers, as well as to places where household incomes are comparatively higher and can support the higher cost of homeownership, the Northeastern states continue to record the greatest gains in the country."