Office Use Reaches Pandemic High, Housing Construction Starts Rise, Commercial and Multifamily Mortg
Office Use Reaches Pandemic High
Big-city office use hit a pandemic high of 47.5% of pre-pandemic attendance for the week that ended Sept. 14 as most major regions remained below 50% in the latest tracking by security technology firm Kastle Systems.
Kastle’s 10-city “Back to Work Barometer,” based on anonymous keycard data from clients’ office buildings, had been stuck around 44% for the past several weeks, landing at 43.4% for the week that ended Sept. 7.
Kastle officials said early September numbers have underscored a post-Labor Day bump in office attendance and were stronger this year than in the prior two years as more workers spend at least a portion their time in offices.
But there are vast differences among major cities tracked in the Kastle barometer. The top three markets for office usage last week, as in most weeks of the pandemic, were all in Texas, led by Austin at 60.5%, Houston at 56.8% and Dallas at 54.9%.
Other markets are well behind those numbers, but they still saw sizable increases over the past two weeks with the New York region posting 46.6% compared with 34.5% for the week that ended Aug. 31. Regions with large tech company contingents still trail the pack in the latest Kastle report, with San Francisco at 40.7% and San Jose, California, at 39.5% of pre-pandemic office attendance.
Housing Construction Starts Rise
Construction starts for new U.S. housing projects increased in August from the prior month, but the latest Commerce Department numbers show lingering headwinds in the form of declining building permits and project completions.
The department reported Tuesday that single- and multifamily project starts totaled approximately 1.6 million for the month, 12.2% above the July figure but 0.1% below the August 2021 number. Single-family starts rose 3.4% in August, stopping five straight months of decline.
“A surprising bounce-back in new home construction is welcome,” Lawrence Yun, chief economist for the National Association of Realtors trade group, said in a statement. It responded to Commerce Department numbers that arrived at a time of consistently declining home sales and builder sentiment in the face of rising interest rates.
The August boost for single-family starts may signal “that builders still see profit opportunities even as they concede on prices,” Yun said.
Still, the Commerce Department figures showed residential building permits issued in August totaled 1.5 million for single and multifamily projects, down 10% from July and a decline of 14.4% from August 2021. Project completions totaled 1.3 million for the month, down 5.4% from July but up 3.1% from August 2021.
Commercial, Multifamily Mortgage Debt Rises
Borrowers took on $99.5 billion in new commercial and multifamily mortgage debt during the second quarter, according to figures released Tuesday by the Mortgage Bankers Association. That was up 2.3% from the prior quarter and marked the second-largest quarterly rise since the trade group began tracking the data in 2007.
Much of that boost came from the still high-demand multifamily category, where mortgage debt rose $35.7 billion, or 1.9%, from the prior quarter. Total U.S. mortgage debt across all categories was $4.38 trillion at the end of the second quarter, according to the trade group’s quarterly survey of lenders.
“The data match the fact that the first half of 2022 saw more commercial and multifamily borrowing and lending than any previous January through June period,” Jamie Woodwell, the trade group’s vice president of commercial real estate research, said in a statement.
The trade group tracks lending among the largest investor groups, including banks and thrifts, federal and government-sponsored agencies, life insurance companies and holders of commercial mortgage-backed securities. Commercial banks continue to hold the largest share of commercial and multifamily mortgages at $1.7 trillion, or 38%, of overall lending.