According to the latest ICE Mortgage Monitor, foreclosure starts hit an 11-month high, but remain below pre-pandemic levels.  In addition, the number of homes for sale in 2024 increased 22% leaving for-sale inventory at its best level since mid-2020.  The ICE Mortgage Monitor provides a view of the current mortgage market, including loan-level performance, home price trends data, secondary market metrics and public records.

“While the share of homeowners past due on mortgage payments remains low by historical standards, we expect mortgage performance to become a growing topic of conversation in 2025, especially among FHA and VA mortgages.”

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According to the latest Yardi Matrix Multifamily Report, multifamily rents are off to a positive start for 2025 with the average U.S. advertised rent increasing $3 nationally in January to $1,746. Year-over-year rent growth was up 20 basis points to 0.8%.

“Multifamily got the year rolling in a positive direction, with rents in January breaking a six-month negative growth streak….[HOWEVER]…One of the questions the industry faces in 2025 is whether demand will repeat 2024’s red-hot level.”

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The U.S. Bureau of Labor Statistics is reporting that the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4% in January, 2025.  The all items index was up 3% for the 12 months ending in January.  The index for shelter rose 0.4% in January, accounting for nearly 30% of the monthly all items increase.

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Rentcafe says office-to-apartment conversions are surging in popularity and predict that 2025 will reach a record-breaking milestone of almost 71k units in the pipeline.  In addition they this trend reflects a shift toward sustainable, community-focused urban spaces that cater to the evolving lifestyles and priorities of modern American cities.  Indeed…

“While the volume of office-to-apartments conversions is growing, indicating increased interest in this type of retrofitting, the carryover of pending projects from one year to another is quite large. This suggests that other factors like conversion feasibility, construction costs, and local incentives come into play.”

Some key points:

• The number of apartments set to be converted from office spaces has skyrocketed from 23,100 in 2022 to a record-breaking 70,700 in 2025.
• Office conversions now make up almost 42% of apartments in future adaptive reuse projects.
• Adaptive reuse of newer buildings (built between the 1990s and 2010s) is on the rise.

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The Wall Street Journal (reposted on Realtor.com) says aging baby boomers are about to rekindle the senior housing market.  They say that while senior housing has been one of the biggest disappointments for commercial real-estate investors, thanks to millions of aging baby boomers, that may be about to change.  In fact, they point out that the oldest of the baby boomers turn 80 in less than a year.

The sector is expected to move from its former glut to a shortage in the next five years. More than 560,000 new units are needed to meet all the demand by 2030, but only 191,000 will be added at current development rates, according to data service NIC MAP.

“We’ve never had a population pyramid that looks like this,” said Arick Morton, chief executive of NIC MAP. “The senior housing industry would need to develop twice as many units as it has ever developed in any single calendar year every year to keep up.”