Lu:
Thank you for having me Dave.
Dave:
I am eager to jump right in because I’ve been following some of your work and when I saw the headline recently, I was a little surprised to see it that you’re saying that affordability is nearing pre pandemic levels. Tell us a little bit about that.
Lu:
Yeah, it’s all because of the supply and demand, Dave. So there has been significant of supply coming online since the beginning of 2024 and we’re talking about multifamily housing units here and that has certainly using a lot of the pricing pressure. We have just gotten the second quarter data last week on the year over year basis, the run growth was fairly moving. We have been in this 1.5% to two percentage point on the year over year basis over the past few quarters, a little longer than a year, and that is significantly below the long-term average. So on the average basis we will be looking at somewhere between three to 3.5% annualized rent growth, but this 1.6 was a little surprising, but nonetheless, that has been using the affordability for the American winter household and that is good news. I’ve gotten the latest rental income ratio just for you and our listener today, Dave. We are officially back to the first quarter of 2020 level, which is, you can consider that as a pre pandemic level depending on how you define pre pandemic altogether, but I’m encouraged.
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