Key Rental Housing Data Release Summary for November 2023

Monthly Releases: Economic Indicators

Consumer Price Index

Bureau of Labor Statistics | Press Release | November 14, 2023

Headline: Inflation was flat in October from the prior month, core CPI hits two-year low (CNBC)

Key Takeaways:

• The index excluding Food & Energy (“Core Inflation”) increased 4% over the last 12 months, after increasing 4.1% in the 12 months ending in September. This is its smallest increase since the 12 months ending in September 2021.
• The All Item CPI increased 3.2% for the 12 months ending in October, after increasing 3.7% in the 12 months ending in September.
• On a month-over-month basis, the All Item CPI remained unchanged from September.
• “Shelter costs, a key component in the index, rose 0.3% in October, half the gain in September as the year-over-year increase eased to 6.7%. Within the category, owner’s equivalent rent, which gauges what property owners could command for rent, increased by 0.4%. A subcategory that includes hotel and motel pricing dropped 2.9%.” (CNBC)

Small Business Optimism Index

National Federation of Independent Business | Report | November 14, 2023

Key Takeaways:

• The Small Business Optimism Index decreased by 0.1 points in October to 90.7, following a 0.5 point decrease in September.
• 22% of owners reported inflation as their number one business concern, down 1 point from the previous month.
• A net negative 17 percent of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down 9 points from September and the lowest reading since July 2020.

Employment Situation Summary

Bureau of Labor Statistics | Press Release | November 3, 2023

Headline: U.S. Job Growth Shows Signs of Slowdown (New York Times)

Key Takeaways:

• The unemployment rate ticked up slightly from 3.8% to 3.9%.
• Total nonfarm payroll employment increased by 150,000 in October, compared with an increase of 297,000 (revised) in September and an average monthly increase of 250,000 over the last 12 months, 
• “The October numbers may have been held down because the survey was taken during major work stoppages… Some 96,000 people reported being out of work because of a strike or labor dispute in October, the most since 1997.” (New York Times)
• The unemployment rate (3.9%) and the number of unemployed persons (6.5 million) are up 0.5 percentage points and 849,000 respectively since their lows in April 2023. 

Consumer Sentiment

University of Michigan | Press Release | November 22, 2023

Key Takeaways per Joanne Hsu, Survey Director: 

• Consumer sentiment fell 4% in November, marking the 4th consecutive month of declines.
• “Long-run business conditions plunged by 15% to its lowest since July 2022. Younger and middle-aged consumers exhibited strong declines in economic attitudes this month, while the sentiment of those 55 and older improved from October.” (Joanne Hsu)
• Year-ahead inflation expectations rose to 4.5% this month, up from 4.2% in October, reaching its highest reading since April 2023.

Consumer Spending

Bureau of Economic Analysis | Press Release | November 30, 2023 

Headline: US consumer spending cools; labor market gradually slowing (Reuters)

Key Takeaways

• Core PCE Index, excluding food and energy:
  • +0.2% MoM (September: +0.3% MoM)
  • +3.5% YoY (September: +3.7% YoY )<< this is a key metric tracked by the Fed 
• Personal Consumer Expenditures (dollars) ticked up 0.2% MoM in October after increasing 0.7% in September. 
• “U.S. consumer spending rose moderately in October, while the annual increase in inflation was the smallest in more than 2.5 years.” (Reuters)

Monthly Releases: Housing and SFR Data

Single-Family Rent Index

CoreLogic | Press Release | November 21, 2023

Key Takeaways:

• Annual U.S. single-family rent growth slowed to 2.6% in September, the 17th consecutive month of declines.
• “Single-family rent growth eased again in September and is now back to the rate recorded before the pandemic.” (Molly Boesel, CoreLogic)
• St. Louis (6.5%), San Diego (6%), and Boston (5.1%) posted the highest annual rent growth, while Austin (-1.4%), Miami (-0.7%), and Las Vegas (-0.2%) saw slight year-over-year rental cost decreases.

Case-Shiller Home Price Index

S&P CoreLogic | Press Release | November 28, 2023

Key Takeaways:

• The National Price Index reported a 3.9% annual change in September, after reporting a 2.6% annual change in August.
• “On a year-to-date basis, the National Composite has risen 6.1%, which is well above the median full calendar year increase in more than 35 years of data.” (Craig Lazzara, S&P DJI)
• The Northeast (+5.3%) and Midwest (+5.0%) continue as the nation’s strongest regions on a year-over-year basis, while the West (-1.3%) remains the weakest.

October Rental Report

Realtor.com | Press Release | November 28, 2023

Key Takeaways:

• October marks the sixth month of YoY rent decline in a row for 0-2 bedroom properties at -0.5%, after a -0.6% YoY decline in September.

• The median asking rent in the 50 largest metros dropped to $1,729, down by $18 from last month and down $47 from the peak seen in July 2022.   

• “Specifically, if the completion rate observed in October 2023 persists throughout an entire year, we can anticipate 417,000 additional units, a 0.9% growth in the rental housing stock to nearly 48 million units by fall 2024 across the U.S, a level that is 3.5% higher than the fall 2019 pre-pandemic rental stock.” (Danielle Hale and Jiayi Xu)

New Residential Construction

HUD | Press Release | November 17, 2023

Key Takeaways: 

• Building permits for single-family homes increased for the 11th consecutive month, reaching a level not seen since May 2022.
• Starts are up 13% YoY for single-family homes, and down 31% YoY for Multi-Family buildings with 5+ units
• Completions YTD through October are down 1% for single family homes compared with 2022 and are up 25% for Multi-Family buildings with 5+ units. 

New Residential Sales

HUD | Press Release | November 27, 2023

Key Takeaways:

• New Home Sales were down 5.6% MoM and up 17.7% YoY in October, after a strong September that was up 16.6% MoM.
• The supply of new homes for sale at the end of October increased to 7.8 months according to the current sales rate, an increase of 13% compared to September.

Existing Home Sales

NAR | Press Release | November 21, 2023

Key Takeaways:

• Existing home sales declined 4.1% MoM in October, and decreased 14.6% YoY. 
• Unsold inventory grew 1.8% from the previous month.
• The median existing-home price increased 3.4% YoY to $391,800.
• “Multiple offers are still occurring, especially on starter and mid-priced homes, even as price concessions are happening in the upper end of the market.” (NAR Chief Economist Lawrence Yun)

Pending Home Sales Index

NAR | Press Release | November 30, 2023

Key Takeaways:

• Pending home sales decreased -1.5% MoM in October, after increasing by 1.1% MoM in September. 
• The index dropped to 71.4 in October, the lowest number since the index was originated in 2001.

The Northeast region saw a slight MoM increase (+2.7%) while the other three regions saw a MoM decrease.

Quarterly Earnings

AMH

Press Release | November 2, 2023

Headline: American Homes 4 Rent reports Q3 earnings, surpasses revenue expectations (Investing.com)

Key Takeaways:

• Average monthly realized rent per property increased 6.8% compared with the third quarter of 2022 for the company’s Same-Home Portfolio.
• Average Occupied Days Percentage was 95.6% for the third quarter of 2023, compared to 96.2% for the second quarter of 2023.
• As of September 30, 2023, the Company’s wholly-owned portfolio consisted of 59,092 homes, compared to 58,693 homes as of June 30, 2023, 
• AMH saw an increase of 399 homes during the third quarter of 2023, which included 615 newly constructed homes delivered through the AMH Development Program and 8 homes acquired through traditional acquisition channels, offset by 224 homes sold to third parties. AMH also developed an additional 99 newly constructed homes which were delivered to unconsolidated joint ventures

Tricon Residential

Press Release | November 8, 2023

Headline: Tricon Reports Q3 2023 Results as Strong Property Fundamentals Continue (BusinessWire)

Key Takeaways:

• Same home NOI growth for the single-family rental portfolio in Q3 2023 was 6.0% year-over-year and the same home NOI margin was 68.5%
• Same home operating metrics remained consistently strong, including occupancy of 97.4%, annualized turnover of 18.8%, and blended rent growth of 6.8% (comprised of new lease rent growth of 6.9% and renewal rent growth of 6.7%)
• Tricon acquired 410 homes during the quarter at an average price of $310,000 per home and lowered the 4th quarter acquisition target to 250 homes. The company also disposed of 175 homes, bringing the total managed portfolio to 37,478.