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Monthly Releases: Economic Indicators
Consumer Price Index
Bureau of Labor Statistics | Press Release | February 14, 2023
Headline: Inflation rose 0.5% in January, more than expected (CNBC)
Key Takeaways:
- CPI increased 0.5% in January after increasing 0.1% in December
- CPI increased 6.4% over the last 12 months (smallest increase since the 12-month period ending October 2021, the peak was in June 2022 at 9%)
- The index for shelter was by far the largest contributor to the monthly all items increase, accounting for nearly half of the monthly all items increase
Consumer Sentiment
University of Michigan | Press Release | February 24, 2023
Key Takeaways:
- Consumer sentiment rose a modest 3% above January (rising for the 3rd consecutive month), while remaining almost 20 points below its historical average
- Short-run inflation expectations remain uncertain, but there was a 12% improvement in the short-run economic outlook
Consumer Spending
Bureau of Economic Analysis | Press Release | February 24, 2023
Headline: Inflation surprisingly rose in January, per the Fed’s preferred gauge (CNN)
Key Takeaways
- Disposable Personal Income (DPI): +2% MoM (December: +0.4% MoM)
- Personal Consumption Expenditures (PCE): +1.8% MoM (December: -0.1% MoM)
- Core PCE Index: +0.6% MoM – higher than analysts were expecting (NOTE: This is a favorite metric of Fed as it excludes food and energy prices)
Small Business Optimism Index
National Federation of Independent Business | Report | February 14, 2023
Key Takeaways:
- SBOI increased 0.5 points in January to 90.3, remaining below the 49-year average of 98
- “While inflation is starting to ease for small businesses, owners remain cynical about future business conditions,” said NFIB Chief Economist Bill Dunkelberg. “Owners have a negative outlook on the small business economy but continue to try to fill open positions and return to a full staff to improve productivity.”
- If it weren’t for the Job Openings and Hiring Plans components, the Index would be much lower. Actual capital spending and inventory investment are very weak as are plans to spend. Earnings are dismal. Actual sales trends are negative and expected real sales are also.
Monthly Releases: Housing and SFR Data
Single-Family Rent Index
CoreLogic | Press Release | February 21, 2023
Key Takeaways:
- U.S. single-family rental price growth rose by 6.4% year over year in December 2022, compared with the 12.1% gain recorded in December 2021
- “While rent growth has been slowing, it still rose at more than double the pre-pandemic rate. Rental price gains began increasing near the end of 2020 and have risen by about an average of $300 in the past two years. Annual single-family rent growth is projected to slow throughout 2023, but it will likely not decline by enough to wipe out gains from the past two years.” -Molly Boesel, Principal Economist at CoreLogic
Case-Shiller Home Price Index
S&P CoreLogic | Press Release | February 28, 2023
Key Takeaways:
- National Index: +5.8% YoY (+7.6% YoY previous month), -0.8% MoM
- December marked the 6th consecutive month of declines, standing 4.4% below its June 2022 peak
- For 2022 as a whole, the National Index rose by 5.8%, compared with 2021’s record-setting 18.9% gain
January Rental Report
Realtor.com | Press Release | February 24, 2023
Key Takeaways:
- The U.S. rental market experienced single-digit growth for the sixth month in a row, and twelve months of slowing from January 2022’s peak of 16.2% growth
- Faster rent growth was seen in some of the least expensive rental markets such as Indianapolis, IN (10.5%), Birmingham, AL (8.8%), Columbus, OH (8.3%)
New Residential Construction
HUD | Press Release | February 16, 2023
Headline 1: US new home construction fell in January for the fifth straight month (CNN)
Headline 2: Single-Family Housing Completions Up 12% YoY (DS News)
Key Takeaways:
- Building Permits: +0.1% MoM | -27% YoY
- Housing Starts: -4.5% MoM | -21% YoY
- Housing Completions: +1% MoM | +12% YoY
- Two consecutive months of improved confidence by builders in a survey from the NAHB has indicated there is some improvement in building activity, and provides some positive signs for the housing market heading into 2023
New Residential Sales
HUD | Press Release | February 24, 2023
Key Takeaways:
- New Home Sales were up 7.2% MoM, and down 19.4% YoY
- Inventory of New Homes is at a supply of 7.9 months given the current sales rate
Pending Home Sales Index
National Association of Realtors | Press Release | February 27, 2023
Key Takeaways:
- Increased for the 2nd consecutive month, up 8.1% from December 2022, while dropping 24% YoY.
- NAR anticipates the 30-year fixed mortgage rate steadily dropping to an average of 6.1% in 2023 and 5.4% in 2024
- NAR expects annual existing-home sales to drop 11.1% in 2023 before jumping 17.7% in 2024
Existing Home Sales
NAR | Press Release | February 21, 2023
Headline: Existing-home sales fell every single month in 2022 (Inman)
Key Takeaways:
- Existing Home Sales: -0.7% MoM | -37% YoY
- Northeast: -3.8% MoM | -36% YoY
- Midwest: -5% MoM | -33% YoY
- South: +1.1% MoM | -37% YoY
- West: +2.9% MoM | -42% YoY
- “Home sales are bottoming out,” said NAR Chief Economist Lawrence Yun. “Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”
Quarterly Releases
Metro Home Prices – Q4 2022
NAR | Press Release | February 9, 2023
Key Takeaways:
- The monthly mortgage payment on a typical existing single-family home with a 20% down payment was $1,969 – up 58% year-over-year (or $720).
- Less than a fifth of metro markets (18%) posted double-digit annual price appreciation (46% in the previous quarter)
- “A slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42% in the past three years,” NAR Chief Economist Lawrence Yun said
Invitation Homes Quarterly Earnings
Earnings Report | February 16, 2023
Headline: Invitation Homes Declined on Disappointing Earnings Results (Yahoo Finance)
Key Takeaways:
- The company disclosed a new quarterly dividend of $0.26, up from $0.22 previously.
- In Q4 2022, Same Store Average Occupancy was 97.3%, down 80 basis points year over year.
- The 2023 Guidance for wholly owned acquisitions is $250-$300M, compared to an actual of $601M in 2022.
- The 2023 Guidance for Same Store Core Revenue Growth is 5.25-6.25%, compared with a 2022 actual of 9%, while Guidance for Core Operating Expenses Growth is 7.5-9.5% which is in line with the 2022 actual growth of 8.6%.
- Embedded within the assumptions for this guidance is an expected increase in property tax expense, higher turnover operating and capital expense as a result of higher expected turnover in 2023, and expectations around continued inflationary pressures.
AMH Quarterly Earnings
Earnings Report | February 24, 2023
Headline: American Homes 4 Rent (AMH) Meets Q4 FFO Estimates (Nasdaq)
Key Takeaways:
- Rents and other single-family property revenues increased by 12.7% YoY, while Core NOI from Same-Home properties increased by 5.7% YoY
- Same-Home Average Occupied Days was 97.0% in Q4, with a similar trend forecasted for 2023
- “Resident 360” will be an investment this year and will help optimize repair & maintenance and customer satisfaction in the future
- The FY 2023 guidance includes no wholly-owned acquisitions – the focus will be on building BTR homes through the AMH development program
Tricon Residential Quarterly Earnings
Coming March 2, 2023