John Burns Research and Consulting

Remodeling demand is picking up! 🔨📈 For the first time in nearly two years, our US Remodeler Index survey, in partnership with Qualified Remodeler, found that more remodelers are reporting larger project backlogs than a year ago. This signals a strengthening market, even as remodelers accelerated project completions in Q4 2024: 📌 Full-service remodelers: +3% YOY completions (flat in 3Q24) 📌 Home improvement pros: +3% YOY completions (+3% in 3Q24) 📌 Design-build firms: +3% YOY completions (+2% in 3Q24) The key takeaway? New demand is outpacing completions, a promising sign heading into 2025. Will this remodeling recovery continue? Check out the graph below and let us know what you think! 👇 #jbrec #remodeling

That Annual Meeting Feeling 🕺 This week, 156 PALS are together in Irvine for our Annual Strategy Meeting, laying the foundation for an exciting year ahead. 🧱 ✨ We’re stacking up innovation, aligning on goals, and reinforcing the roadmap that will drive us forward for years to come. #jbrec #culture

Another great National Multifamily Housing Council Apartment Strategies conference is in the books. Shout out to the team at #NMHC for another fantastic event. Here are my main takeaway's from today's sessions and the conversations I had around the conference: Apartment demand was incredibly robust in 2024 and vacancy has peaked. Renter household formation was driven by declining rents in many markets, continued job gains, and unaffordable for sale housing. These three components all played a roll in historic demand last year.   There is a lot of capital to be deployed/dry powder but it’s better to be patient than to deploy capital into bad assets just to get the money out there. 1970s product and heavy value add deals are hard to pencil because the vintage and property quality make it cost prohibitive. Many of these 1970s deals are being rendered obsolete. The risk is not justified by the return.    Family offices and foreign capital have become larger players in multifamily investment as institutional capital has waited on the sidelines and syndicators have gone away. Family offices and foreign capital tend to have different investment strategies and longer hold periods.   There is still a lot of interest in Build to Rent from both the acquisition and development side. There is a wide variety of quality among BTR developers but as the industry matures the demand for high quality product will increase. Demand and absorption will also continue to rise as more BTR becomes more mainstream in many markets.   The yield curve is no longer the harbinger for recessions that it once was considered to be. Many components lead to economic strength and weakness and the sole metric of an inverted yield curve should not be used to predict a recession. We have recently seen both inverted and normal yield curves and the likelihood of a recession has remains.    Uncertainty leads to a pull back in investment and there continues to be heightened uncertainty surrounding the future of short term interest rates and immigration. This caused a significant decline in multifamily housing starts and we will not see housing starts pick up until stability returns to the rate market and clarity emerges around immigration.   AI will significantly transform the world and has the potential to greatly improve productivity. As a result the nature of work will change dramatically and the built environment must be flexible to adapt to changing demands of working and living in the age of AI   Selective tariffs are not as impactful as wide spread tariffs because of trade diversion, in which goods are shipped from countries with tariffs to countries without tariffs, slightly modified and then shipped to the US. Widespread tariffs are destructive because they isolate countries and industries. Furthermore it stifles investment because companies are more likely to just wait four years for a new trade environment rather than put forth the investment to onshore manufacturing.

📢 Single-family rental (SFR) listings are rising—up +23% YOY nationally! Texas leads with +36% YOY growth as more homes shift from for-sale to rental. What’s the key factor impacting SFR growth in your market? (Graph below 👇) #jbrec #sfr #housing

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With today’s release of December 2024 new home sales data we now know homebuilders grew sales +2.5% for the year in 2024 after +4% growth in 2023. Compare that to the existing home market where sales fell -1% in 2024 after -19% in 2023.  Such a stark difference between the new vs. resale part of housing over the last few years under the ongoing higher-for-longer interest rate backdrop. John Burns Research and Consulting

US existing home sales fell in 2024 to the lowest level since 1995. So what's in store for the new year? “The starting point for 2025 is, you’re kind of already starting in a spot with not that much momentum,” said Director of Research Rick Palacios Jr. “I don’t really see how that thesis reverses and gets more optimistic as long as mortgage rates stay at 7%.” ⬇️ Read the full article by Nicole Friedman and The Wall Street Journal 🔗 https://lnkd.in/eBgBDSuX #jbrec

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