Pretium’s Housing Insights, September 2023


Pretium’s Housing Insights, September 2023

September 2023

Resilient single-family home prices have diverged from commercial real estate prices

Supply-demand imbalance has supported home prices despite record rate shock

Since the Federal Reserve began its campaign to raise interest rates in early 2022, there has been a marked divergence between the price trends of single-family and traditional commercial real estate. Major commercial property price indices show declines from recent peak values of as much as 10-15%1 ; meanwhile, single-family residential prices declined only briefly during 2H22 and have gone on to set new all-time highs during 2023.2 This price divergence is illustrated in Exhibit 1 and is a departure from prior rate cycles when different real estate sub-sectors had similar rate sensitivities.

Differing financing structures is one widely discussed factor that has likely created greater rate sensitivity for commercial real estate – its financing is typically shorter in term and relies more on floating interest rates. More than 40% of commercial real estate debt matures through 2025; furthermore, roughly one-third is floating rate.3 For single-family homes, 80-90% of mortgage loans originated over the past decade have had fixed 30-year rates with most of the remainder fixed for either 5 or 7 years.4 While financing differences are important, they don’t fully explain why single-family home prices have set new highs despite the largest rate shock in the modern history of US housing. A less discussed but potentially more important factor explaining the surprising resilience of singlefamily prices is a more favorable supply-demand dynamic when compared to commercial real estate.

The pandemic has likely structurally increased demand for housing, especially single-family homes.5 In terms of supply, single-family housing has seen less investment relative to demand since the Great Financial Crisis (GFC). This is illustrated in Exhibit 2, which compares construction spending for different real estate asset types. Multifamily and industrial have emerged as the two pillars of most investors’ real estate strategies and in response investment in new construction has increased more than fivefold over the past quarter century. By contrast, fundamentals for retail and office have proven more challenging and construction has grown slowly. Single-family construction grew during the mid-2000s, but it has seen slower growth during the post-GFC period. Overall, single-family investment has grown in-line with office investment despite a stronger demand profile.

Within single-family housing, single-family rentals have experienced a net reduction in supply over the past few years as described in the October 2022 Pretium Housing Insights.6 Single-family rentals are arguably the only real estate asset type to have seen supply shrink over the past few years. Looking ahead, Pretium expects that favorable supply-demand dynamics will continue to underpin single-family fundamentals in the coming years, both in terms of rent and price growth.

Statements throughout these materials, including these regarding the opportunity, Pretium’s advantages and the market represent the opinions and beliefs of Pretium. There can be no assurance that these will materialize.

  1. Real Capital Analytics, Commercial Property Price Indices as of July 20, 2023; Green Street, Commercial Property Price Index as of August 4, 2023.
  2. CoreLogic, Home Price Index as of September 5, 2023.
  3. Mortgage Bankers Association, Quarterly Commercial/Multifamily Mortgage Debt Outstanding as of June 29, 2023.
  4. CoreLogic, “Rising Rates Lead to Increase in Adjustable-Rate Mortgage (ARM) Activity”, June 26, 2023.
  5. Pretium Housing Insights, “Increased long-distance migration persisted in 2022”, January 2023.
  6. Pretium Housing Insights, “Investor activity in housing had no discernible impact on homeownership during the pandemic”, October 2022.

Jonathan Pruzan, Former Morgan Stanley COO & CFO, Joins Pretium as President


Jonathan Pruzan, Former Morgan Stanley COO & CFO, Joins Pretium as President

September 5, 2023

Jonathan Pruzan, Former Morgan Stanley COO & CFO, Joins Pretium as President

NEW YORKSept. 5, 2023 /PRNewswire/ — Pretium, a specialized investment firm with more than $50 billion in assets under management, today announced that Jonathan Pruzan has joined the firm as President and a member of the Executive Committee, effective immediately. In this newly created role, Mr. Pruzan will oversee many of Pretium’s strategic and operational initiatives, reporting to Don Mullen, Pretium’s Founder and CEO.

Jonathan Pruzan

Mr. Pruzan brings over 30 years of financial services and asset management experience, a proven track record of creating and capitalizing on growth opportunities, and a demonstrated ability to develop and lead high-performing teams across diverse economic environments. Mr. Pruzan spent the last 28 years with Morgan Stanley, serving in a variety of leadership positions, including Chief Operating Officer, Chief Financial Officer, and Head of Corporate Strategy. As part of Morgan Stanley’s leadership team, Mr. Pruzan played a key role in Morgan Stanley’s acquisitions of E*Trade Financial, Eaton Vance, and Solium Capital. Prior to holding these corporate positions, Mr. Pruzan built his career as an investment banker and was Head of the Global Financial Institutions Group, where he advised financial institutions and governments around the world on hundreds of billions of dollars of capital raisings, mergers, restructurings, and other strategic transactions.

“Adding a strategic leader of Jon’s caliber demonstrates the strength of Pretium’s model and market position as one of the leading investors in real estate and credit,” said Don Mullen, Founder and CEO of Pretium. “Pretium is a fast-growing, integrated firm that supports the entire asset lifecycle by embracing opportunity where others resist complexity. Jon is part of an elite class of financial services leaders, having excelled as an operating executive and a dealmaker. At a time of significant consolidation in the asset management space, we look forward to benefiting from Jon’s long history of success driving organic growth and identifying compelling acquisitions and partnerships to take the firm to the next level.”

“Pretium’s unique ecosystem is built on Don’s pioneering vision to produce, curate, and manage assets with a high barrier to entry across the residential and corporate credit markets,” said Mr. Pruzan. “Successful acquisitions such as Anchor Loans, Deephaven Mortgage, and Selene Finance are a testament to the Pretium team’s entrepreneurship and ability to effectively integrate new platforms. I am extremely excited to be joining the firm and to work closely with Don and the entire team to capitalize on the tremendous opportunities ahead to grow the business.”

Mr. Pruzan earned a Bachelor of Arts in Political Science and Economics from Tufts University and serves on its Board of Trustees. Mr. Pruzan is also a member of the Board of Trustees of the New York-Presbyterian Hospital, the Board of Directors of the Peterson Institute of International Economics, the Board of Directors of The American Ditchley Foundation, and a Trustee Emeritus and past Board Chair of the educational nonprofit, Summer Search NY.

About Pretium

Pretium is a specialized investment firm focused on U.S. residential real estate, residential credit, and corporate credit. Pretium was founded in 2012 to capitalize on investment and lending opportunities arising as a result of structural changes, disruptions, and inefficiencies within the economy. Pretium has built an integrated analytical and operational ecosystem within the U.S. housing, residential credit, and corporate credit markets, and believes that its insight and experience within these markets create a strategic advantage over other investment managers. Pretium’s platform has more than $50 billion of assets, comprising real estate investments across 30 markets in the U.S., and employs more than 4,000 people across 50 offices, including its New York headquarters, Dubai, London, Seoul, and Sydney. Please visit for additional information.


Jon Keehner / Kate Thompson / Lyle Weston
Joele Frank, Wilkinson Brimmer Katcher


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