While macroeconomic headwinds remain a constant challenge, the small multifamily sector has demonstrated its ability to bend rather than break.

Multifamily rent growth in the U.S. continued to be distributed throughout a variety of markets, which contrasted with the previous two years when Sun Belt markets dominated the list.

The U.S. multifamily market held steady during the third quarter of 2023, as high mortgage rates and a lack of inventory in the housing market continued to drive rental demand.

More than halfway through 2023, the single-family rental (SFR) sector continues to demonstrate why it deserves the attention of multifamily investors.

While macroeconomic headwinds may not recede soon, tenant dependability, the core strength of small multifamily, has proven to be a powerful antidote to financial market storms.

Multifamily rent growth in the U.S. was spread throughout a diverse selection of markets during the second quarter of 2023, a change from the last several quarters when Sun Belt markets dominated the list.

The U.S. multifamily market continued to slow during the second quarter of 2023. Rent growth retreated from the skyrocketing pace of the last two years, although still remained positive alongside continued high rental demand.

SFR’s significant structural support has enabled it to take noticeable steps forward, while other commercial property types have been merely treading water.

The small multifamily sub-sector ended 2022 on a high note with originations falling just behind 2021’s peak. As economic storm clouds continue circling, small multifamily appears fortified from any reverberations that may result.

Arbor’s latest Affordable Housing Trends Report, developed in partnership with Chandan Economics, offers a wide-ranging lens into the complex, though critically important, affordable and workforce housing sectors.