The Multifamily Bull Case: This Week’s Data

ADP Jobs Report – Data Released 12/4/24

What it is: A monthly report that gives an estimate of how many new jobs were created in the U.S. private sector. It’s published by a company called ADP, which processes payrolls for many businesses.
146,000 new private jobs were created in the private sector last month, below the expectations of 166,000.
The previous month was also revised down to 188,000.
What it means: A weaker than expected report makes the Fed more likely to cut interest rates

The value-weighted index of multifamily prices rose 1.4 percent month-over-month in October. The index was down 7.1 percent year-over-year.
Multifamily prices are below their longer-term trend line, which would be positive for prices in the coming years ahead if they begin to mean revert.
Prices are now down 25.2% from the high reached in July 2022

Despite adding 5.8 million housing units over approximately four years (since our previous estimate), housing demand has increased by almost the same amount, resulting in very little progress in reducing the housing shortage.
In the aggregate, we estimate that U.S. housing stock is 3.7 million units below what is needed given our current population and assuming inflation-adjusted housing costs returned to historical levels.

Apartments accounted for 37% of all commercial real estate sales in 2024’s 3rd quarter, and they are back in line with pre-pandemic standards
Sales during the quarter totaled $35.8 billion, a 9% year-over-year increase, which marked the second consecutive quarter of year-over-year growth
Sales over the past two quarters averaged $38.3 billion, aligning with the pre-pandemic norm from 2015 through 2019