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Where Homeowners Are Taking Advantage of Lower Mortgage Rates
Ranked: The World’s Top 20 Economies by GDP Growth and 12 more real estate insights
Vidit S
March 17, 2025
Macro Trends
Unemployment rates vary widely among U.S. states link
Unemployment rates across the 50 states varied by 380 basis points in December 2024. South Dakota had the lowest rate at 1.9%, while Nevada and California had the highest at 5.7% and 5.5%, respectively.
South Carolina saw the biggest jump in unemployment from December 2023 to December 2024 at 170 bps. Connecticut had the largest decline, dropping 120 bps over the same period.
The national unemployment rate increased 30 bps year-over-year to 4.1% in December 2024. Massachusetts, Oregon, Texas, and West Virginia were within 10 bps of the national average.
Real Estate Trends
Small Multifamily Valuations Start to Rise Again and Originations Are Up link
Small multifamily valuations rose 0.7% quarter-over-quarter in Q4 2024 but were still down 2.1% year-over-year. This marked the seventh straight quarter of price declines, though the rate of decline has slowed.
Origination volumes reached $46.7 billion in 2024, close to the pre-pandemic average of $50.5 billion from 2015–2019. Higher interest rates have reduced cash-out loans from 75.6% of the total in Q3 2022 to 68.4% in Q4 2024.
Cap rates for small multifamily properties averaged 6%, 40 basis points higher than the overall multifamily average of 5.6%. Occupancy rates climbed 11 basis points year-over-year to 97.5%, showing stable demand despite high construction levels.
Industrial demand increases amid manufacturing boom link
Manufacturing construction spending has tripled since 2021, with 346.2 million square feet under construction as of January 2025. Over 100 million square feet of new space has already been delivered since 2022.
Dallas-Fort Worth led the nation with $6 billion in industrial sales in 2024, followed by Houston and Phoenix at $3.4 billion each. Los Angeles was the top port market, closing $3.2 billion in sales.
Vacancy rates have risen but are expected to stabilize in 2025, even as demand remains strong. Bridgeport saw the highest premium for new leases at $5.22 more per square foot, followed by Miami, New Jersey, and Boston.
Top 10 U.S. Metros with Quarterly Refinance Mortgage Originations on the Rise link
Refinance mortgage originations rose 6.4% in Q4 2024 to 642,000 loans, the highest level since mid-2022. This marks the third straight quarterly increase, up 28.2% from Q4 2023.
Hilton Head Island-Bluffton-Beaufort, SC saw the largest jump, with refinance originations increasing 56.4% from 369 in Q3 to 577 in Q4. Wilmington, NC and San Jose, CA followed with increases of 48.9% and 43.8% respectively.
Despite the rise in refinances, total mortgage originations fell 3% from Q3 2024 due to a 7.5% drop in home purchases and an 11.6% drop in home equity credit lines. Lending activity remained nearly two-thirds below the 2021 peak.
click on the link to see the rest of the list.
The 5 Cities Where Homeowners Are Taking Advantage of Lower Mortgage Rates link
Refinancing activity increased despite rising rates, with 641,918 refinance mortgages issued in Q4 2024—up from 603,324 in Q3. Total mortgage originations reached 1.64 million in Q4 alone.
Hilton Head, SC saw the biggest jump in refinancing at 56.4%, followed by Wilmington, NC (48.9%) and San Jose, CA (43.8%). Buffalo, NY (41.9%) and San Francisco, CA (35.4%) also saw significant increases.
The current mortgage rate of 6.76% is the lowest since December 2024. Most homeowners with rates below 6% are unlikely to benefit from refinancing unless they bought when rates were over 7%.
Multifamily Permitting Continues to Shrink link
Six of the top 10 metro areas saw multifamily permitting drop by double digits. Phoenix, Austin, and Los Angeles had the biggest declines, ranging from 33% to 42%.
New York-White Plains led the nation with a 60% increase in permitting, reaching 36,630 units. Atlanta also saw a jump, while Dallas and Austin permitted over 14,000 units each.
Jacksonville (-5,300), Minneapolis/St. Paul (-5,177), and Riverside (-4,269) had the steepest declines outside the top 10. Permitting in the top 150 markets has stayed below 400,000 units for six months after peaking at 577,000 units in late 2022.
Proptech startups that just got funded
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Pro Member Only Content Below
Most of the insights below stem from extra research and include content from paid sources and special reports.
5 trends defining CRE development in 2025
Shifting global supply chains are driving long-term demand for industrial space. Reshoring, geopolitical shifts, and increased domestic production are fueling demand for logistics hubs near ports and rail yards.
Gen Z is expected to form 1.5 million new households in 2025, driving demand for affordable multifamily housing in inner and second-ring suburbs. Rising housing costs and shifting work-life balance are creating demand across generations.
Data centers are now seen as strategic infrastructure, critical for AI and digital transformation. Developers are prioritizing locations near financial hubs, e-commerce centers, and national security operations with reliable power and affordable land.
This Market Tops the Nation for Data Center Absorption
Atlanta led the nation in data center absorption with 705.8 MW of positive net absorption in 2024, nearly 39 times more than in 2023. This is the first time Northern Virginia has been displaced as the top market.
Atlanta's data center inventory increased by 222% last year to 1,000.4 MW, with 2,159.3 MW under construction in the second half of 2024 — a 195% annual increase. AWS is investing $11 billion in new data center projects.
North America's data center supply under construction doubled year-over-year to a record 6,350.1 MW. Vacancy rates hit a historic low of 1.6%, and AI-driven workloads are expected to grow from 15% in 2024 to 40% by 2030.
The Major Metros at Risk of a Slump Due to Foreclosures and Unemployment
Two-thirds of the 50 most vulnerable counties were in California, Illinois, Florida, and the New York City region. Kings County (Brooklyn) and Richmond County (Staten Island) were the most at-risk in New York.
Brooklyn had the highest unaffordability, with 106.5% of the average income going to housing costs. Pasco County, FL, had the highest share of underwater mortgages at 15.8%, followed by Baltimore and New Orleans at 15.3%.
Charlotte County, FL, had the highest foreclosure rate at 1 in 198 homes. Kern and Kings counties in California had the highest unemployment rates at 7.9%.
How a Kansas town is enticing people to move there
Neodesha, Kansas, is offering big incentives to attract new residents, including waiving state income tax through 2026, student loan repayment up to $15,000, and free college tuition through the Neodesha Promise scholarship. Over 30 people have started moving there since the program launched in 2024.
The town has struggled with population loss since the Standard Oil Co. refinery closed in 1971, which cut the population in half overnight. The mayor said the town’s survival depends on reversing this trend.
Other cities are using similar strategies — Topeka offers up to $15,000 for home purchases, West Virginia provides $12,000 and coworking perks, and The Shoals in Alabama pays $10,000 to remote workers. The goal is to create long-term community ties, not just financial benefits.
These are the most competitive rental markets in the U.S.
Developers completed nearly 600,000 multifamily units last year — the highest since 1974 and a 34% increase from 2023. New York City, Dallas, and Austin led the number of new rentals.
Lease renewal rates rose to 63.1% in early 2025, up from 61.5% last year. Higher mortgage rates and high home prices are keeping renters from moving.
Miami is the most competitive rental market with 14 applicants per unit. The Midwest dominates the top 20 with cities like Chicago, Detroit, Lansing, Grand Rapids, Cincinnati, Milwaukee, and Minneapolis-St. Paul.
February 2025 Hottest Housing Markets
Hartford, Conn. ranked as the hottest market in February, with homes selling in an average of 38 days and a 6.6% price increase year over year. It saw more than 4 times the views per property compared with the national median.
Toledo, OH (+24.4%), Reading, PA (+10.6%), and Providence, RI (+7%) recorded the highest price growth among the top markets. National prices fell 0.8%, but the hottest markets saw a 0.9% increase.
Large markets like Philadelphia and New York saw the biggest jumps in rankings, climbing 77 and 48 spots, respectively. Philadelphia is now the 58th hottest market, with homes selling in 52 days, down 7 days from last year.
Off Topic
Ranked: The World’s Top 20 Economies by GDP Growth (2015-2025)
Unreal Real Estate
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That's all folks.
Cheers,
Vidit