Economic Headlines

The economic narrative has shifted from "gradual recovery" to "geopolitical volatility" as conflict in the Middle East continues to dictate the pace of inflation and interest rates. For multifamily operators, the immediate impact remains the "inflation tax" on renters’ wallets, slower job growth, and the subsequent effect on 2026 occupancy and rent growth.

· Energy Volatility: After peaking near $120/bbl last week, Brent Crude fell below $100.00 this morning following news of potential peace talks. However, the relief at the pump is lagging; national Gasoline averages sit at $3.98/gal, up over $1.00 from just 30 days ago.

· Capital Markets: Stocks have also experienced a slight rebound this week, but the S&P 500 was still down 4% from late February. The Dow was down 5.5%. Investors are currently pricing in a stagflation scenario where growth slows but costs remain high.

· Mortgage Rates: The 30-year fixed-rate mortgage (FRM) has jumped to 6.45% according to Bankrate, its highest level of 2026. While the lack of affordability in the owner-housing market boosts renter demand, the overall impact is a drag on the economy.

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Economic Headlines

Impacts related to the conflict in the Middle East continue to dominate economic headlines. All data stated are based on the publication date of this report, and they are subject to change.

· Crude Oil near $100/bbl: Up $30 since late February.

· Gasoline at $3.72/gal: An 80-cent jump in 30 days.

· Market Volatility: S&P 500 -2.4%; Dow -4.1% since the conflict began.

· Mortgage Rates: Increased from 5.98% to 6.11%.

Rising mortgage rates and market volatility are increasing the cost of homeownership, forcing many renters to delay their purchase plans and stay in the rental market longer. While this supports steady occupancy, the "inflation tax" on wallets from higher everyday costs may limit rent growth this year.

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Labor Market Loses Momentum

The February jobs report was weaker than expected, with the U.S. losing 92,000 jobs and falling well short of the growth economists projected. While the unemployment rate remains relatively low at 4.4%, the widespread nature of the decline—hitting everything from healthcare to construction—suggests a softening that could eventually impact renter household income and overall consumer confidence.

For multifamily operators, this is a troubling signal heading into leasing season. Job growth is key to absorbing new supply and increasing occupancy rates, but employment has declined in three of the past five months.

If this trend continues, it may push the Federal Reserve to reconsider rate reductions sooner than planned to help stabilize the broader economy, but inflation is facing a new challenge that is part of that decision.

Consumers’ Pain at the Pump

On top of the labor news, the military campaign in Iran has led to the closure of key global shipping lanes, creating immediate ripples in the energy market. We’re already seeing these disruptions translate to higher prices at the pump, which effectively acts as a "stealth tax" on consumers and can tighten the discretionary budgets of renters.

At the time of this publication, AAA reported that the national average price for a gallon of regular gas was $3.58, up from $2.94 a month ago.

As gas prices climb, the Fed finds itself in a difficult spot—trying to manage a cooling job market while simultaneously watching for inflation risks driven by energy costs. For asset managers, this means the "higher-for-longer" interest rate environment might have a more complicated exit strategy than we hoped for at the start of the year.

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Prior to increased global tensions, mortgage rates hit a milestone as the average 30-year fixed-rate dropped to 5.98% last week—the first time the metric has dipped below 6% since September 2022.

This slight decline from 6.01% the prior week (and 6.76% a year ago), paired with rising inventory, is expected to pull buyers off the sidelines if the lower mortgage rates persist or continue to decline. Additionally, Freddie Mac reports that refinancing applications have already doubled year-over-year.

A resurgence in housing activity can add fuel to the broader economy. Refinancing frees up thousands in annual interest payments for consumer spending, while increased home sales drive job growth for supporting industries.

Mohawk Industries’ CEO was recently quoted in The Wall Street Journal: “U.S. consumers [spend] an estimated five times as much on remodeling their flooring in the first year after buying a home than non-movers.”

While these lower rates are a welcome reprieve for housing, the developing unrest in the Middle East remains a significant wildcard. We expect to see the first impacts reflected in energy costs at the pump, but the long-term effect on inflation and bond yields—and by extension, mortgage rates—remains to be seen.

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Major upgrades to Radix’s market intelligence

This week, we've integrated millions of new public data points into our Research product, adding tens of thousands of properties to our Radix Analytics platform for a more comprehensive look at shifting dynamics within specific MSAs and submarkets.

All data is based on publicly available information, including RealRents. These properties were previously available for individual benchmarking analysis and are now also included in our aggregate trends.

With expanded market coverage, your management and investment decisions are now more informed than ever.

More enhancements are on the way.

This update is a key milestone in our ongoing data evolution. As we continue to enhance our platform, you can anticipate further advancements to our market intelligence in the months to come. We look forward to helping you navigate these evolving trends with our most robust dataset to date.

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The first half of February delivered a wave of favorable economic data, painting a more optimistic picture for the start of the year than many analysts predicted. The combination of cooling costs and a resilient labor market provides a strong foundation for the housing sector as spring approaches.

Inflation inched closer to the Fed’s target of 2.0%. The Consumer Price Index (CPI) rose 2.4% year-over-year in January, the slowest pace since last May. Significant relief came from lower gasoline prices, a high-visibility win for consumer sentiment that provides immediate breathing room for household budgets.

The Core CPI, which excludes volatile food and energy prices, increased 2.5%, marking the lowest growth rate for this metric since April 2021. This suggests that the underlying inflationary pressures that have plagued the economy for years are finally stabilizing.

January’s labor market report outperformed expectations. Approximately 130,000 jobs were added in the month, and the 4.3% unemployment rate indicates a sturdy labor market. Paired with robust wage growth of 3.7%, renters and buyers alike are entering the year with stronger purchasing power than anticipated.

The strength of job creation has been overstated in recent years, but if last week’s report is accurate, it bodes well for an economy that had a lot of question marks heading into 2026.

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The labor market kicked off 2026 with a surprising 130,000 new jobs in January based on today’s report from the Bureau of Labor Statistics. It was more than double economists’ expectations.

From an industry perspective, health care and social assistance (+124,000) and construction (+33,000) were major winners for monthly job gains. The federal government (-34,000) and financial activities (-22,000) lost jobs.

While the overall number is great news to start 2026, many will wait and see if these figures hold given the number of downward adjustments in recent years.

Based on the annual benchmark revisions released today, the monthly job gains for 2025 averaged just 15,000 per month, and practically every month was adjusted lower than previously reported.

That said, if these numbers are accurate, they bold well for demand for the multifamily industry this year. Strong job creation would help absorb excess supply totals from recent years. If hourly earnings remain close to January's annual growth of 3.7%, rent growth should bounce back as occupancy rates stabilize.

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The U.S. Census Bureau’s first look at 2025 population data revealed a significant cooling trend. As of July 1, 2025, the U.S. population grew by 1.8 million from the prior year, or 0.5%. It was a sharp deceleration compared to the prior year’s 1.0% gain of 3.2 million people. Analysts attributed much of the change to a substantial decline in international immigration.

The slowdown in overall population growth was particularly relevant for the multifamily sector because it influenced demand for housing.

From a regional perspective, the Midwest has been a standout for multifamily operations performance in recent years. Low supply has helped, but Census data suggested strong demand as well. All states in the region recorded a population gain in 2025, aided by slightly positive domestic migration which had been negative for years.

At the state level, South Carolina led the nation with 1.5% population growth, but it was down from 1.8% the prior year. Idaho and North Carolina followed closely at 1.4% and 1.3%, respectively.

Texas led the U.S. in total population gain with more than 391,000 residents. While lower than recent years, it was essentially twice as many as Florida which had the second highest amount of 197,000.

Only five states saw a population contraction: California, Hawaii, New Mexico, Vermont, and West Virginia.

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