Covid-19 Weekly Economic & Industry
Update
July 22, 2020
-25.0% 0.0% 25.0% 50.0% 75.0% 100.0% 125.0%
Motor vehicle & parts dealers
Furniture & home stores
Electronics & appliance stores
Building material/garden equipment
Food & beverage stores
Health & personal care stores
Gasoline stations
Clothing/accessories stores
Sporting goods, hobby, musical, books
General merchandise stores
Miscellaneous store retailers
Nonstore retailers
Food services & drinking places
Retail Sales Month-Over-Month Percent Change
Economic Impacts
Source: U.S. Census Bureau, Advance Monthly Retail Trade Survey, July 16, 2020
• Retail sales increased 7.5 percent in June on a month-over-month basis.
• Sales of clothes, electronics and furniture increased significantly as more and more stores were able to reopen.
• Online shopping (non-store retailers) decreased slightly but was still the biggest winner year-over-year, increasing 23.5 percent.
Economic Impacts
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0.0
20.0
40.0
60.0
80.0
100.0
120.0
University of Michigan Consumer Sentiment Index
Sources: University of Michigan; Moody’s Analytics
• Consumer sentiment has remained relatively flat since the Covid-19 crisis began, ranging between 72 and 78 points.
• July’s preliminary figuressuggested a somewhat more pessimistic consumer, with the decline in the index driven by lower expectations for the future.
July 2020
17.416.6
15.715.0 14.9
6.6 6.1 5.6 5.14.3
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
Bottom/Top States for Unemployment Rates June 2020
Economic Impacts
• The highest unemployment rates in June were mainly among Northeastern states, which reopened slowly and more cautiously than those in other regions.
• Unemployment rates inKentucky, Utah and Idahowere well below the U.S. average of 11.1 percent.
Source: U.S. Bureau of Labor Statistics
Economic Impacts
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0
10
20
30
40
50
60
70
80
Seas
onal
ly A
djus
ted
Perc
ent C
hang
e, M
onth
ly
NAHB/Wells Fargo Housing Market Index
Source: NAHB/Wells Fargo Housing Market Index, July 16, 2020
• Homebuilder confidence in July experienced another substantial increase and was back to March levels.
• All components of the index increased but present conditions in the single-family home sales market and increased traffic of prospective buyers led the way.
July 2020
Economic Impacts
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0
200
400
600
800
1000
1200
1400
Thou
sand
s of U
nits
Sea
sona
lly A
djus
ted
Annu
al
Rate
s
Housing Starts
Single-family Multifamily
Source: U.S. Census Bureau and U.S. Department of Housing and Urban Development, Privately Owned Housing Starts: 5-Unit Structures or More and 1-Unit Structures retrieved from FRED, Federal Reserve Bank of St. Louis July 21, 2020.
• Single-family and multifamily housing starts continued their momentum in June, increasing by 17.2 and 18.6 percent, respectively, from last month.
• Figures for both indicators were also on par with last year’s levels.
June 2020
Economic Impacts
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0
200
400
600
800
1000
1200
1400
Thou
sand
s of U
nits
Sea
sona
lly A
djus
ted
Annu
al
Rate
s
Housing Permits
Single-family Multifamily
Source: U.S. Census Bureau and U.S. Department of Housing and Urban Development, New Private Housing Units Authorized by Building Permits: 5-Unit Structures or More and 1-Unit Structures retrieved from FRED, Federal Reserve Bank of St. Louis July 21, 2020.
• Monthly permitting activity increased for single-family homes but declined for multifamily properties by 14 percent.
• Average monthly permits for multifamily for the first half of the year were off from last year but remained at a healthy level of 417,000.
June 2020
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
Money saved from deferred or forgiven payments (tomeet spending needs)
Unemployment insurance (UI) benefit payments
Borrowing from friends or family
Money from savings or selling assets
Credit cards or loans
Stimulus (economic impact) payment
Regular income sources like those used before thepandemic
Used in the Last 7 days to Meet Spending Needs All Renters Renters with Slight/No Confidence in Paying Rent • Renters with slight or no
confidence in their ability to pay next month’s rent reported vastly different income sources to meet their spending needs compared with the total renter pool.
• Borrowing, savings, stimulus checks and unemployment insurance benefits are more important to renters who may have challenges making rent payments.
Source: U.S. Census Bureau Household Pulse Survey, July 2 – July 7; Totals may not sum to 100% as the question allowed for multiple categories to be marked.
Rental Housing Impacts
-7.0% -6.0% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0%
St. Louis
Indianapolis
Phoenix
Cincinnati
Orlando
Milwaukee
Los Angeles
Seattle
Las Vegas
New York
Hardest Hit Metro Areas for Rent Collection(Change from prior year in percent of households paying partial or full
rent)
July 1 - July 20
Apartment Industry Impacts
• Metro areas with the lowest rent collections remained largely unchanged since the beginning of the month.
• Midwestern cities such as Milwaukee, Cincinnati and St. Louis were new entrantsto the list as was Phoenix, which has experienced a surge of Covid-19 cases.
Source: RealPage, Inc. Rent Payments July 1 – July 20, 2020
4.0%3.5%
3.1% 3.1% 2.8%
-4.3%-3.4%
-1.3% -1.0% -1.0%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
Top/Bottom Markets for Rent Impacts(Year-over-Year Rent Growth)
Apartment Industry Impacts
• Rents decreased 0.4% in June on a year-over-year basis; annual growth turned negative for the first time since December 2010.
• Rent changes are likely to remain negative for the remainder of 2020.
• Deliveries in many gateway cities are expected to be depressed since these markets were hit hardest by the COVID-19 pandemic.
Source: National Multifamily June Report by Yardi