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THE GARDEN ISLAND
Friday, November 26, 2021 • B3
Slice of the American Dream
traded owners of single-family houses for rent underscore the favorable outlook. Invitation Homes and American Homes 4 Rent both reported strong third-quarter results, boosted by rising rents and occupancy rates near all-time highs. BTIG analyst James Sullivan reAlex Veiga iterated his “Buy” rating for both real estate investment trusts, or ASSOCIATED PRESS REITs, noting that housing market trends, including the supply chain LOS ANGELES — Homebuilders challenges and rising labor and and other real estate companies material costs that are slowing the are increasingly betting that pace of construction for homewould-be homebuyers frustrated with a shortage of homes for sale builders, remain “very favorable” and runaway prices will settle for for single-family rentals. renting their slice of the American Construction of new U.S. homes Dream. was running at a seasonally adWhile individual homeowners justed annual rate of 1.52 million and mom-and-pop investors still units as of October, according to account for the vast majority of the Commerce Department. That’s single-family rental homes, homean increase of 0.4% from the rate a GENE J. PUSKAR / ASSOCIATED PRESS year earlier. But single-family builders have stepped up conhome starts fell 3.9% from Septemstruction this year of new houses This is a home for sale in Mount Lebanon, Pa. being built for rent. ber to October and were down investors or corporate landlords In the third quarter, builders crease from a year earlier, accord- more than 10% from last year. broke ground on 16,000 single-fam- eager to capitalize should potenThe number of housing starts ing to the National Association of for built-for-rent houses remains Realtors. Homes sell within days ily homes slated to become renttial homeowners continue to small relative to newly started struggle to find affordable proper- of being put up for sale. als. That’s the highest quarterly homes slated for sale. All told, These trends have been good total of housing starts for built-to- ties. builders broke ground on 47,000 rent homes going back to at least “Traditional builders are finding news for landlords, however. 1990, according to an analysis of it very hard to do entry level hous- Rents for U.S. single-family homes homes for rent over the last four quarters, a year-over-year inU.S. Census data by the National ing,” said Ali Wolf, chief economist jumped 10.2% in September from Association of Home Builders. at Zonda Economics, a real estate a year earlier, according to real es- crease of 17.5%, according to the The trade association’s analysis industry tracker. “The build-toNAHB. In the same period, buildtate information company Coreincludes only homes that builders rent space kind of serves its purLogic. The firm excludes ers broke ground on 1.14 million are going to hang onto and rent single-family homes. pose as being entry level housing apartments from its single-family out. That excludes homes being Some of the nation’s largest in a market where new homes at a home rental data, though it inbuilt to be sold to real estate inhomebuilders are looking to take reasonable price point are few and cludes condominium and townadvantage of the demand for vestment trusts or investors plan- far between.” home rentals. Rising home prices and fierce CoreLogic expects rents to con- build-for-rent homes. ning on renting the properties. Some sell houses to investors competition for relatively few afWhile those rental homes actinue climbing through at least the or companies looking to take over end of this year, citing strong decounted for only 5.4% of all sinfordable homes for sale are communities already packed with stretching the limits of affordabil- mand, low supply of homes for gle-family housing starts in the third quarter, builders are dou ity for many would-be buyers. The rent and a strengthening job mar- tenants. In July, PulteGroup anbling down on the build-for-rent median price of a previously occu- ket. nounced a deal to build and sell model, with some already aiming Recent quarterly earnings from roughly 7,500 homes over the next pied U.S. home jumped to to build more homes for rent for the nation’s two largest publicly five years to Invitation Homes. $353,900 in October, a 13.1% in-
Housing market trends fuel singlefamily home rental growth
US mortgage rates mixed: 30-year unchanged at 3.1% ASSOCIATED PRESS WASHINGTON — U.S. mortgage rates were mixed this week. The average rate on the benchmark 30-year, fixed rate home loan was unchanged from last week at 3.1%; a year ago, it stood at 2.72%. Fifteen-year, fixed rate mortgage rates blipped up to 2.42% from 2.39% last week; it was 2.28% a year ago. The U.S. housing market has been hot, helped by low interest rates, a limited supply of available homes and pent-up demand from consumers who spent much of the past year and a half cooped up at home. Many economists expect U.S. interest rates to rise in coming months as the Federal Reserve moves away from the easy money policies it adopted last year when the coronavirus slammed the U.S. economy last spring. “Looking ahead, homebuyers can expect a continued gradual rise in mortgage rates punctuated by occasional dips,” said Danielle Hale, chief economist at Realtor.com. A strong rebound from the pandemic recession has fueled a runup in consumer prices, which climbed 6.2% last month from a year earlier — biggest gain since 1990. Rates on five-year adjustable rate loans fell to 2.47% from 2.49% last week. They were at 3.16% a year ago.
US new homes sales rise 0.4% in October as prices climb ASSOCIATED PRESS WASHINGTON — U.S. sales of new homes edged up 0.4% last month, coming in below expectations as housing prices continued to climb. The Commerce Department reported Wednesday that sales of new single-family homes rose to a seasonally adjusted annual rate of 745,000 last month from 742,000 in September. Economists had expected October new home sales to come in at a 795,000 annual pace. And the September sales rate was revised sharply lower from 800,000 in Commerce’s original report. New home sales were down 23% from a year earlier. The median price of a new home, the point where half the homes sold for more and half for less, rose to a record $407,700 last month, up nearly 18% from a year earlier. New home sales rose 11% from September to October in the Midwest and 0.2% in the South. They fell 11.8% in the Northeast and 1.1% in the West. The housing market has been hot, thanks to rock-bottom mortgage rates and pent-up demand from consumers locked in last year by the pandemic. On Monday, the National Association of Realtors reported that sales of previously occupied homes rose 0.8% last month to a seasonally adjusted annual rate of 6.3 million, strongest annual pace since January.
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