Investor Index 9.26.25
Apartment starts rise 16% YOY in August
In August 2025, multifamily apartment construction activity showed mixed signals: starts for buildings with five or more units rose 15.8% year-over-year (to a rate of 403,000) but declined 11% month-over-month, while permit issuance dropped 10.8% year-over-year. At the same time, completions for such buildings plunged 28.7% year-over-year, and the total number of units under construction fell 20.2% year-over-year. Observers interpret the decline in deliveries as easing supply pressures for operators and expect a relatively stagnant construction market through the end of 2025.
Full Article: https://www.multifamilydive.com/news/apartment-starts-august-hud/760514/
The Fed cut its interest rate, but long-term rates — including those on mortgages — went higher
Despite the Federal Reserve cutting its benchmark interest rate (its first cut in months), mortgage rates rose shortly afterward rather than falling. The article explains that mortgage rates are more strongly tied to longer-term bond yields (especially the 10-year Treasury) than to short-term Fed policy moves. Thus, even with the Fed easing, upward pressure on Treasury yields—and investor expectations about inflation, economic growth, and future rate paths—helped push mortgage rates higher. The result is that homebuyers and refinancers may not reap the usual benefits of a Fed rate cut, at least not immediately.
Full Article: https://www.cnbc.com/2025/09/20/the-fed-cut-its-interest-rate-but-mortgage-costs-went-higher.html
New Housing Construction Continues to Slow
In August 2025, new housing construction generally continued to slow, particularly in the single-family sector, where permitting dropped to its lowest levels since 2023 and starts likewise declined. For the multifamily sector (five or more units), the seasonally adjusted annual rate (SAAR) for permits and starts were both 403,000 units: down 6.7% from July and down 10.8% from the prior year for permits, while starts were down 11% month-to-month but up 15.8% year-over-year. Multifamily completions were much weaker year-over-year (down 28.7%) even though they were up modestly month-to-month; units under construction declined 20.2% from last August. Regionally, multifamily permitting rose sharply in the West (up 34.9%) but declined in the South, Midwest, and Northeast compared to a year earlier.
Full Article: https://www.realpage.com/analytics/august-2025-multifamily-permit-update/