Happy New Year - Survive Til '25 Might End Up Being a Roar in '24

[Alexander Szikla]

Ring in the New Year with a bang and a world of possibilities! As we step into 2024, let's raise our glasses to fresh opportunities, prosperous investments, and the keys to unlocking success. Happy New Year, investors! Rockson Advisory wishes you all a year filled with profitable ventures and rewarding partnerships.

So what do we have to look forward to? Well, there are a number of positive factors pushing a "Roar in 2024" narrative!

With the possibility of a mild recession, the Federal Reserve's announcement to cut rates three times in late 2024 and institutions like the Federal Housing Finance Agency (FHFA) and Freddie Mac hinting at a potential uptick in transactional activity after a slower 2023 which saw a 70% year over year decline in sales volume the "Survive Til '25" adage might be moot.

The FHFA has established the 2024 lending caps for Fannie Mae and Freddie Mac at $70 billion each, totaling $140 billion for the year. Notably, loans supporting workforce housing are exempt from these caps this year, signaling an anticipated surge in lending within this segment compared to the limitations in 2023.

Moreover, the Mortgage Bankers Association projects a 26% overall lending increase and a 19% surge specifically in multifamily transactions, pointing toward an active and thriving landscape ahead.

What's the catch? Is there a caveat? Yes - oversupply! Nationally, we are still facing a housing shortage; however, certain key markets could see some potential challenges in rent growth and occupancy. With a substantial 1.2 million apartment units under construction at the start of the year, an estimated record-breaking 510,000 units are set for completion by year-end.