Restrained stock and rising costs pose challenges for developers. Over the past year, a lack of available building materials and skilled labor contributed to sizable surge in prices and delayed or canceled the completion of some residential and commercial real estate projects. Year over year, the cost of lumber has jumped 90 percent and steel pric-es rose 67 percent, while gypsum used to make drywall is up 12 percent and concrete rose 3 percent. Labor… Read More

Growth remains steady. In the second quarter, the economy ex-panded 6.5 percent on an annualized basis. Gains would have been larger but supply-chain challenges and a labor shortage hamstrung improvement. Those issues should be transitory, however, as amplified federal unemployment benefits sunset in September. In May, 9.2 million jobs were available nationwide, the highest level on record. Additionally, the national eviction moratorium may expire soon, which could encourage more workers to reenter the workforce. Supply-chain… Read More

Apartments attracting more investors. Investor confidence in multifamily is strengthening after the record-setting second quarter performance and an outlook that is bolstered by a lack of moderately priced homes available for purchase. The buyer pool for apartments is growing, facilitating a competitive bidding market. Multifamily assets traded for an average of $171,000 per unit over the past year ended in June, up 5 percent annually. Meanwhile, the average cap rate fell 20 basis points to… Read More

Pandemic heightens changes in lifestyle. The leading edge of the 72 million millennial cohort began to age into the homebuying stage of life during the global financial crisis. Deterred by the housing crisis that followed, many delayed purchasing. Although millennial homebuying had picked up before the health crisis began, it was sped up dramatically as companies sent employees home to work. No longer tethered to the office and confronted with economic uncertainty, priorities and lifestyles… Read More

 Unemployment steadily tightens. Job creation surpassed 900,000 new positions for the second consecutive month in July, lowering the unemployment rate 50 basis points month over month to 5.4 percent. While above the historically low 3.5 percent unemployment recorded just prior to the pandemic, the measure is still below the 5.9 percent average from 2000-2019. The restoration of 16.7 million jobs has been the driving force behind this drop in unemployment, although the exit of about… Read More

Consumer spending continues to grow. In June, core retail sales increased 1.1 percent as Americans continued to use money accumulated from stimulus and savings. Although more spending is aimed at services due to the broad reopening, plenty of new cash in the system supported growth for traditional retailers. Nonetheless, rapidly rising inflation, which measured 0.9 percent last month, dampens the better-than-anticipated retail sales figure. A portion of the increase comes from higher prices rather than… Read More

Employment growth climbs. The pace of hiring accelerated in June as employers brought on 850,000 new personnel, following the creation of 583,000 jobs last month. These gains reflect the ongoing reopening of the economy, particularly in California and New York. Recruiting may have also been aided by the cessation of expanded federal unemployment benefits in some states. Overall, payrolls have expanded by 15.6 million people since the April 2020 trough, although headcounts still trail the… Read More

Consumer spending well ahead of pre-pandemic level. Although core retail sales dipped 0.8 percent from April to May, expenditures are 15.7 percent above the February 2020 level as stimulus funds and amplified unemployment benefits flooded the economy with additional capital. Monthly gains are anticipated to be modest this year as further direct cash payments are unlikely. Only one more bill can be passed through the Senate with the reconciliation process, and resistance to additional large spending… Read More

Unemployment falls in May but job growth misses the mark. Employers added 559,000 personnel to payrolls last month, above the 278,000 positions created in April but below many economists’ expectations. The higher pace of hiring was nevertheless sufficient to drop the unemployment rate 30 basis points in May to 5.8 percent. While markedly below the recent high of 14.8 percent, the measure still exceeds the pre-crisis level by 230 basis points. Despite a shortfall of… Read More

Retail spending levels off. As the stimulus dissipated, consumer spending dipped 0.8 percent in April as shoppers stepped back from record purchasing. Year over year, core retail sales jumped 37.6 percent, though the annual comparison comes against a backdrop of broad shutdowns in April 2020. Some of the slowdown can be attributed to a wide pause in reopening policy changes last month. Moving forward, however, several modifications are on the horizon that should propel consumer… Read More