Articles

The Most Active Markets for New Multifamily Development in 2025

After the volume of multifamily permits fell nationally in 2023 and 2024, this year is on pace to be a year of stabilization for multifamily development. According to the U.S. Census Bureau, out of the top 100 largest U.S. metros by population, 47 had more multifamily permits through the first six months of 2025 than they did over the same period last year. Driven by strong underlying multifamily demand, attractive investment opportunities are leading to rebounding construction pipelines. As multifamily permitting rises, we explore the markets where new permits issued are most concentrated and where construction activity is gaining momentum.

Current Reports

Small Multifamily Investment Trends Report Q3 2025

Arbor’s Small Multifamily Investment Trends Report Q3 2025, developed in partnership with Chandan Economics, examines the factors behind the continued upward trajectory of the sector amid an ongoing capital markets recalibration. Several of its core performance metrics, including valuations, originations, and credit standards, have shown measurable improvement as a multifamily market-wide normalization takes shape. Supported by strong fundamentals, small multifamily stands tall despite economic uncertainty.

Analysis

U.S. Multifamily Market Snapshot — August 2025

The U.S. multifamily market stood on the cusp of a new cycle at the halfway point of 2025, as demand continued to be driven by favorable demographic trends and a structural need for housing.

Articles

Small Multifamily Continues Steady Price Growth

Small multifamily valuations realized positive year-over-year growth in the second quarter of 2025, demonstrating the sector’s ongoing resilience in an unsettled economic environment. Steady rent growth, improving operating expense ratios, and stable cap rates helped move price growth into positive territory.

Articles

Metro-Level SFR Rent Growth Trends in the First Half of 2025

Albany, NY, and many other affordable mid-sized metropolitan statistical areas (MSAs) outpaced the national rent growth average for single-family rental (SFR) properties in the first half of 2025, according to an analysis of Zillow’s Observed Rent Index, which tracks the 100 largest markets in the U.S.

Articles

Larger Buildings and Smaller Units: How New Multifamily Completions Continue to Evolve

Driven by high construction costs, land constraints, and rental affordability, developers are increasingly prioritizing smaller units in higher-density multifamily properties. Utilizing data from the U.S. Census Bureau’s annual Survey of Construction, the research teams at Chandan Economics and Arbor Realty Trust have analyzed how the characteristics of new multifamily properties continue to evolve.

General: 800.ARBOR.10

Q: What is the Arbor Small Multifamily Price Index (ASMPI)?
A: The ASMPI estimates the average price appreciation for small multifamily properties on a quarterly basis, by comparing small multifamily cap rates and small multifamily rents.
 

Q: What is an index?
A: • An index starts with an assigned base, then increases or decreases with the change in value. In the case of the ASMPI, a base value of 100.0 is assigned to Q1 2000.
• For example, if the ASMPI stood at 100, then increased 5.0% during the quarter, the new value would be 105. Likewise, if the index decreased 5.0%, the new value would be 95.
• Other frequently used indices in the real estate industry include the S&P CoreLogic Case-Shiller Home Price Index and the Consumer Price Index.
 

Q: What is the purpose of the ASMPI?
A: • Given the lack of affordable rental housing supply to meet the robust demand, the index’s quarterly data provides insights on potential investment opportunities in the property sector.
• The index fills an important need in the marketplace for quarterly data analytics focused on small multifamily properties.
 

Q: How is the ASMPI calculated?
A: The ASMPI is calculated by comparing the historical relationship of cap rates on properties with primary mortgages between $1 million and $7.5 million, and the rental income earned on small multifamily properties (5 to 49 units).
 

Q: How do you define a “small multifamily property”?
A: For the purposes of the ASMPI, we define small multifamily properties as those which have 5 to 49 units. This is consistent with the distinctions made in the U.S. Census Bureau’s American Community Survey.
 

Q: How do you define a “primary mortgage” on a property?
A: A primary mortgage means that at least 50% or more of the financing on the property comes from this loan. For the purposes of the ASMPI, we use Chandan Economics’ database of loans with primary mortgages of $1 million to $7.5 million.
 

Q: What is the formula for calculating the ASMPI?
A: Property Valuation = Net Operating Income / Cap Rate
 

Q: What is a cap rate?
A: A cap rate is the annual rate of return on a property, also known as the annual yield.
 

Q: How do you determine the cap rates for the formula?
A: Chandan Economics tracks small multifamily cap rates through its loan database and economic models consisting of small multifamily properties with primary mortgages between $1 million and $7.5 million.
 

Q: How do you determine the net operating income for the formula?
A: • Operating income is calculated based on Chandan Economics’ models of annual contract rents for multifamily properties with 5 to 49 units, using data published by the U.S. Census Bureau in the American Community Survey.
• Operating income is adjusted for any vacancy losses. Other forms of property income other than direct rental income are not included as part of the model.
• An assumption in the model is that variable operating expenses are passed through to tenants.
 

Q: What is the methodology for the ASMPI?
A: The Arbor Small Multifamily Price Index is calculated by comparing the historical relationship of cap rates and operating income. Cap rates data are sourced from Chandan Economics’ loan database and data models consisting of properties with primary mortgages between $1 million and $7.5 million. Operating income is estimated by Chandan Economics’ models of annual rents on multifamily properties with 5 to 49 units. Primary sample data used for small multifamily rents model is sourced by the U.S. Census Bureau as part of the American Community Survey.
 

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