New York

One of those “D’s” might be reversing - the repopulation of New York is picking up speed. Manhattan rents soared 23% in January compared to a year earlier, according to the latest report by Jonathan Miller for Douglas Elliman.

That puts rents just shy of the January record set in 2020, just before the onset of the crisis. Landlord concessions that proliferated during 2020 were offered on just a quarter of new leases, in line with the long-run average.

What was an already low vacancy rate has coincided with a rapid drop in inventory. Listings fell annually at a record rate for a sixth straight month. Jonathan tells Bloomberg that there's “a lot of additional room to rise at the lower half since it hasn’t reached parity with pre-pandemic levels, but most of the upside potential for the high end has probably already occurred.”

Inflation everywhere

The U.S. rate of inflation hit 7.5% in January, its highest rate for 40 years. Lift the lid and price rises have moved well beyond goods affected by the pandemic. Food, electricity and shelter were the largest contributors, chipping away at pay checks everywhere.

The ten year treasury yield surpassed 2% for the first time since 2019 and Goldman Sachs now expects the Fed to hike rates seven times over the course of the year. Mortgage rates are at their highest level since January 2020.