Key Rental Housing Data Release Summary for October 2023

Monthly Releases: Economic Indicators

Consumer Price Index

Bureau of Labor Statistics | Press Release | October 12, 2023

Headline: Consumer prices rose 0.4% in September, more than expected (CNBC)

Key Takeaways:

• The index excluding Food & Energy (“Core Inflation”) increased 4.1% over the last 12 months, after increasing 4.3% in the 12 months ending in August.
• The All Item CPI increased 3.7% for the 12 months ending in September, matching the 12-month increase ending in August
• The index for shelter was the largest contributor to the monthly increase, accounting for over half of the increase, up 0.6% MoM and 7.2% for the last 12 months ending in September.

Small Business Optimism Index

National Federation of Independent Business | Report | October 10, 2023

Key Takeaways:

• The Small Business Optimism Index decreased 0.5 points in September to 90.8, following a 0.6 point decrease in August. 
• Inflation and labor quality are the top concerns for small business owners.
• 43% of all owners reported job openings they could not fill in the current period, up 3 points from August.
  • The difficulty in filling open positions is particularly acute in the construction, retail, manufacturing, and services sectors.

Employment Situation Summary

Bureau of Labor Statistics | Press Release | October 6, 2023

Headline: Jobs report shock: American economy added a stunning 336,000 jobs in September (CNN)

Key Takeaways:

• Total nonfarm payroll employment increased by 336,000 in September (the highest increase since January) and the unemployment rate remained unchanged at 3.8%.
• According to Bloomberg, consensus forecasts anticipated a more tepid increase of 170,000 new payrolls.
• Both the labor force participation rate, at 62.8%, and the employment-population ratio, at 60.4%, were unchanged over the month. 
• While markets still expect that the Fed will hold benchmark where they are in November, Friday’s labor market update increased the likelihood of another rate hike by about 9%, according to the CME Group. 

Consumer Sentiment

University of Michigan | Press Release | October 27, 2023

Key Takeaways per Joanne Hsu, Survey Director: 

• “Consumer sentiment fell back about 7% this October following two consecutive months of very little change.” (Joanne Hsu)
• Assessments on personal finance declined 8% MoM, and one-year expected business conditions fell sharply by 16% MoM.

Consumer Spending

Bureau of Economic Analysis | Press Release | October 27, 2023 

Headline: Key Fed inflation gauge rose 0.3% as expected; spending tops estimate (CNBC)

Key Takeaways

• Core PCE Index, excluding food and energy:
  • +0.3% MoM (August: +0.1% MoM)
  • +3.7% YoY (August: +3.8% YoY )<< this is a key metric tracked by the Fed 
• Personal Consumer Expenditures (dollars) ticked up 0.7% MoM in September after increasing 0.4% in August. 
• Personal spending increased 0.7%, which was better than the 0.5% forecast, while personal income rose 0.3% which was 0.1% below the estimate.

Monthly Releases: Housing and SFR Data

Single Family Rent Index

CoreLogic | Press Release | October 17, 2023

Key Takeaways:

• Annual U.S. single-family rent growth slowed to 2.9% in August, the 16th consecutive month of declines.
• Single-family rents have increased by 30% nationwide since February 2020.
• St. Louis (7%), Chicago (5.7%), Boston (5.6%), and San Diego (5.6%) posted the highest annual rent growth, while Austin (-0.9%), Las Vegas (-0.8%), and Miami (-0.5% saw slight year-over-year rental cost decreases.

Case-Shiller Home Price Index

S&P CoreLogic | Press Release | October 31, 2023

Key Takeaways:

• The National Price Index reported a 2.6% annual change in August, after reporting a 1% annual change in July.
• The National Price Index is 6.4% above its level in January 2023

Chicago led the way for the fourth consecutive month with the highest year-over-year gain among the 20 cities tracked)

September Rental Report

Realtor.com | Press Release | October 23, 2023

Key Takeaways:

• September marks the fifth month of YoY rent decline in a row for 0-2 bedroom properties at -0.6%, matching the decline in August.

• The median asking rent in the 50 largest metros dropped by $5 to $1,747 compared to last month.
• In September 2023, the annual completion rate of multi-family buildings with 5+ units stood at 445,000 units, which increased by 10% MoM and 15% YoY.

New Residential Construction

HUD | Press Release | October 18, 2023

Key Takeaways: 

• Building permits were down 14% MoM for Multi-Family buildings with 5+ units, and up 1.8% for single-family homes.
• Completions were up 10% for Multi-Family buildings with 5+ units and up 5% for single-family homes.
• Starts are up 8.5% YoY for single-family homes, and down -31% YoY for Multi-Family buildings with 5+ units.  

New Residential Sales

HUD | Press Release | October 25, 2023

Headline: US new home sales scale 19-month high as median price drops (Reuters)

Key Takeaways:

• New Home Sales were up 16.6% MoM and up 33.9% YoY in September, after decreasing 8.7% MoM in August.
• The supply of new homes for sale at the end of September dropped to 6.9 months according to the current sales rate, a decrease of -11.5% compared with August.
• New Home Sales reached a rate not seen since February 2022.

Existing Home Sales

NAR | Press Release | October 24, 2023

Headline: America’s frozen housing market: Sales hit a 13-year low (CNN)

Key Takeaways:

• Existing home sales declined 2% MoM in September, and decreased 15.4% YoY. 
• Individual Investors purchased 18% of homes in September, up from 15% in September last year.
• Existing Home Sales were pulled down to their lowest level in 13 years. (CNN)

Pending Home Sales Index

NAR | Press Release | October 26, 2023

Key Takeaways:

• Pending home sales increased 1.1% MoM in September, after decreasing 7.1% MoM in August.
• NAR predicts existing home sales will decrease 17.5% in 2023 before rising 13.5% in 2024. 
• NAR forecasts that the 30-year fixed mortgage rate will average 6.9% for 2023 and decrease to an average of 6.3% in 2024, while the unemployment rate will lower to 3.7% in 2023 before increasing to 4.1% in 2024.
• “Despite the slight gain, pending contracts remain at historically low levels due to the highest mortgage rates in 20 years. Furthermore, inventory remains tight, which hinders sales but keeps home prices elevated.” (Lawrence Yun, NAR)

Quarterly Earnings

Invitation Homes

Press Release | October 26, 2023

Headline: Largest US Single-Family Rental Owner Says It Too Is Having Trouble Finding Houses To Buy (CoStar)

Key Takeaways:

• Added 2,291 homes to its portfolio during the third quarter ending Sept. 30, 2023, including 1,870 homes added through a portfolio acquisition in July.
• Reported a blended rent growth of 6.2%, returning to historical norms.
• Reported a construction pipeline of 1,931 homes in the United States in an effort to upgrade its housing stock. One of those builders, PulteGroup, entered into a five-year deal beginning in 2021 with Invitation Homes to buy 7,500 homes during that time.