Jul 2, 2019

College housing costs are out of control

Illustration: Sarah Grillo/Axios

The prices for U.S. student housing have never been higher, rising to an average of nearly $92,000 per bed, data shows.

How we got here: Previously a lightly invested subsection of the housing market, investment managers, REITs and cross-border investors jumped in with both feet and were behind 50% of all acquisitions in the sector by early 2018. That's up from just 30% a few years ago, new reporting from Real Capital Analytics finds.

  • Investors have saturated the space to the point that capitalization rates — the profitability potential on real estate investments over a one-year horizon — have fallen to a record low.
  • "Student housing was once a property sector ... not managed by professional investors," Jim Costello, senior vice president at Real Capital Analytics, writes. "Institutional investors have 'discovered' this sector in the current economic cycle and price performance has reached record highs as a result."

The big picture: Student housing prices are just the latest example of the ongoing doldrums in the U.S. housing market that has been driven largely by decreasing home affordability, even though price increases have slowed in 2019 and mortgage rates are near record lows.

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Data: Real Capital Analytics; Chart: Axios Visuals

The housing market is still out of reach for average Americans, according to the U.S. Home Affordability Report, released Wednesday by ATTOM Data Solutions. The report found that median selling prices were too high for average wage earners in three-fourths of U.S. real estate markets in Q2.

  • And while affordability is improving in four out of five markets compared with last year, the gap between home-price appreciation and wage growth has barely budged.

What to watch: "After robust gains over the past five years, the nationwide nominal house price index is now 40% above its 2012 low-point and 4% above the peak reached in 2006," analysts at JPMorgan concluded in a recent study.

Go deeper: The Fed says student loans are smothering the housing market

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 10 p.m. ET: 1,014,673 — Total deaths: 52,973 — Total recoveries: 210,335Map.
  2. U.S.: Total confirmed cases as of 10 p.m. ET: 244,678 — Total deaths: 5,911 — Total recoveries: 9,058Map.
  3. 2020 updates: The Democratic National Committee said its July convention will be postponed until August because of the coronavirus. A federal judge declined to delay Wisconsin's April 7 primary election.
  4. Jobs latest: Coronavirus unemployment numbers are like a natural disaster hitting every state.
  5. Public health latest: Anthony Fauci called for all states across the U.S. to issue stay-at-home orders. The FDA will allow blood donations from gay men after 3-month waiting period, citing "urgent need."
  6. Business latest: Treasury Secretary Steven Mnuchin said oil companies are eligible for aid from new lending programs the Federal Reserve is setting up, but not direct loans from his department.
  7. U.S.S. Theodore Roosevelt: Navy removes captain of aircraft carrier who sounded alarm about coronavirus.
  8. 1 future thing: In developing countries, consequences of COVID-19 could be deeper and far more difficult to recover from.
  9. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  10. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Mark Meadows considers new White House press secretary

Photos: Alyssa Farah, Defense Department; Stephanie Grisham, Alex Wong/Getty Images; Kayleigh McEnany, Scott W. Grau/Icon Sportswire via Getty Images

White House Chief of Staff Mark Meadows has privately discussed bringing on Pentagon spokesperson Alyssa Farah or Trump campaign spokesperson Kayleigh McEnany as a new White House press secretary, two sources familiar with the talks tell Axios.

Why it matters: Meadows' start on Tuesday as Trump's new chief presents a chance to overhaul a press shop that's kept a low profile since President Trump ended the tradition of daily press secretary briefings.

CNN: Fauci advises all states issue stay-at-home orders

Dr. Anthony Fauci listens to President Trump speak during a briefing on April 1. Photo: Win McNamee/Getty Images

Director of the National Institute of Allergy and Infectious Diseases Anthony Fauci recommended on Thursday that all states across the U.S. implement stay-at-home orders, at a CNN town hall.

Why it matters: The recommendation stands in contrast to President Trump's calls for "flexibility." Nearly 4o states have issued stay-at-home orders to promote social distancing as a way to combat the novel coronavirus — but the orders vary in strictness and duration.

Go deeperArrow5 hours ago - Health