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The small multifamily subsector, strengthened by sound structural fundamentals, is well-positioned to face distress due to interest-rate pressure. Even though pricing has slid lower and cap rates have risen, it should remain resilient in the coming quarters. A deep dive into a uniquely positioned subsector, Arbor’s Small Multifamily Investment Trends Report Q1 2023, developed in partnership with Chandan Economics, analyzes the competing headwinds and tailwinds influencing investment performance.

Fannie Mae Multifamily recently honored Arbor with its prestigious 2022 DUS Lender Award for Excellence in Technology, citing it as “a constant source of innovative ideas” and “a stalwart partner” in driving “Fannie Mae’s digital transformation for the DUS community.”

The U.S. multifamily market continued to show signs of slowing during the first quarter of 2023. Rent growth was down from the skyrocketing pace seen in 2021 and 2022, although demand remained strong and vacancy held near historic lows.

Even as home prices posted their first annual decline in over a decade in March, affordability remains an urgent economic and policy challenge. Today, no states currently have an adequate amount of affordable and available homes for their lowest-income renters. With public support for improving housing affordability growing stronger, state and local governments have been prioritizing policy solutions to close the nationwide housing gap.

Single-family rentals’ role in the U.S. housing ecosystem is malleable. In different markets, this product type serves different purposes — acting as a magnet for transient lifestyle households in some metros, while providing families with affordable access to quality public school districts in others. As a result, SFR retention rates vary dramatically across the country, depending not only on the cost of homeownership but on the purpose that single-family rentals serve in that market, creating a unique group of top markets.

Over the last few years, the list of top rent growth markets was dominated by the more affordable Sun Belt markets. However, over the last several months, a more diverse selection of markets has comprised the list.

High interest rates and low housing supply have bolstered demand for single-family rental (SFR) communities as Millennials and Generation Z seek affordability in starter homes. Today, SFRs represent more than half of the U.S. rental market, and economists project that share will grow in the years ahead. With low operating costs, steady supplemental income, and long-term growth potential, investing in single-family homes offers considerable upside in a recessionary environment.

Arbor is proud to have planted thousands of trees in the past 40 years – more than 13,000 in the past two years alone – and we’re still going strong. Since day one, Arbor’s focus on community-building, which grew from the forward-thinking vision of Founder, Chairman and CEO Ivan Kaufman, has defined the company’s direction and driven its philanthropic activities.

Even with concerted public and private initiatives, the affordable housing shortage has persisted in cities and communities across the U.S. Arbor’s Affordable Housing Trends Report Spring 2023, developed in partnership with Chandan Economics, analyzes the challenges and assesses the outlook of a sector that has gained more investor attention amid growing economic headwinds.

Freddie Mac multifamily loans provide customized, innovative multifamily financing solutions for use in the purchasing and refinancing of properties with rentable housing units. From Small Balance Loans to Floating-Rate, commercial real estate borrowers can benefit from excellent terms and conditions. Among a wide range of Freddie Mac options available through Arbor, these five loan programs have key advantages worth considering.