The U.S. economy passed another hurdle last week, as the final Q4 2022 estimate of GDP showed 2.9% annualized growth. While many economists still believe a recession will hit this year, last week’s report proves that the economy was on strong footing throughout the second half of last year. The focus will shift to Q1 growth, and the first official estimate will be released at the end of April. The Atlanta Fed models GDP in real time through their GDP“Now tracker, and current estimates call for a Q1 growth rate of 1.7 percent annualized. Treasury rates have retreated in recent days as clarity around monetary policy emerges. The two-year treasury, which hit 5% in early March is down below 4% and the 10-year treasury has fallen roughly 50 basis points in the same time frame. Softening inflation fears, and the ensuing drop in the 10-year treasury rate, is good news for the multifamily transaction market, as some buyers and sellers may be coming closer to reaching acceptable deal terms.
On the operating side, fundamentals improved across the board once again. Nationwide occupancy ticked upward despite new supply additions. Traffic increased as well. New leases signed remained flat however, and thus far in 2023 traffic gains have outpaced leasing gains. As a result, the national closing ratio has fallen to 31.3%.
Key Takeaways – Data as of 04/03/2023
Traffic and Leases:
Occupancy and ATR:
Net Effective Rent:
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