Multifamily Investments Continue 2018’s Strong Performance

August 15, 2018

 

The multifamily housing market is poised to continue its strong performance in the second half of 2018.  Gradual corrections in select markets continue to moderate rental growth and vacancy rates.  However, strong demand and continuing deficits in the supply of new units are keeping the market stable.  Barring any major economic calamities, the multifamily market should continue on in a similar trajectory.  Below are some highlights from Housing Wire’s article and Freddie Mac’s latest report.

 

 

  • New supply of apartments are pushing vacancy rates higher, but are still near a very healthy ~5%

  • Rental rate growth is slowing, but only moderately to ~4.5%

  • New jobs and low unemployment continue to fuel demand and household formation

  • Demand for apartments remain very strong while a deficit in new unit construction continues

  • New unit construction is only now starting to meet demand from population growth and new household creation

  • The pipeline of new construction is set to peak this year, with deliveries slowing through 2019

  • Of the largest markets, Miami, Detroit and Minneapolis have the largest unit deficits while New York City, Chicago and Los Angeles have the largest surpluses

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