Amid high interest rates and fears of recession over the past year, 2023 Q2 GDP grew at a rate of 2.4% which was higher than expected. Increases in consumer spending as well as commercial real estate spending helped to drive this growth.

While the real estate market has dealt with ups and downs stemming from supply chain issues and construction slowdowns reated to the pandemic, at this point in time construction is on track.  Multifamily housing development has increased greatly over the past few years and there has been an increase in rental rates to justify such demand.  Much of the development that began during the past few years is nearing completion with close to 520,000 new multifamily units being delivered in 2023, the most since the 1980’s.  Permitting data however suggests that the construction boom will slow as interest rates are increasing the cost for construction loans.  Similarly due to interest rates making the cost of financing a home greater,  more people are choosing to rent due which leads to a greater demand for multifamily housing and higher prices. Buyers looking for single family homes are seeing prices increasing as well from a lack of inventory.

There remains a strong demand for housing overall. Apartment rental rates, although growing at a slower and more predictable rate, will continue to go up through at least 2024. Rent growth tends to follow income growth.   Seeing continued rent growth is a positive sign for the economy, signaling that people are making more money and should continue to increase spending in all sectors of the economy.