Research Briefing | Jul 21, 2023

US housing dynamics driving apartment sector to outperform

Following a significant increase in 2021 and 2022, multifamily rents are trending down. Looking into 2024, rent growth is projected to be weaker but we do not expect outright rent declines. Multifamily demand stickiness from a resilient consumer will fuel rent growth, albeit below the pandemic spikes. This will translate into a stronger residential performance, relative to other property types, in the forecast.

What you will learn:

  • Elevated mortgage rates and low available single-family housing stock will limit the downside for single-family house prices in the coming quarters. Elevated house prices will propel multifamily demand as renters delay homeownership.
  • Unlike the supply and demand factors keeping single-family house prices high, an increase in new multifamily units delivered over the past few years has put downward pressure on rents nationally. Tighter lending conditions and labor shortages in the construction industry will challenge multifamily construction in the near term.
  • Affordability trends vary at the market level, particularly for those strong rent-growth markets in the Sunbelt and in the West, where there was an influx of demand during the pandemic.


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