Small Multifamily

Strong economic growth, rising interest rates, and exceptionally tight labor markets contributed to small balance lending volume reaching an annualized rate of $47.0 billion through the first half of 2018, down 5.8% from last year.

Small apartment buildings comprise the largest share of workforce housing demand within the top 20 metros, while single-family rentals dominate the next 30.

Workforce rental housing demand has increased the most in the smaller metros where apartment properties, both small and large, are increasing their shares of this demand segment.

Data on the extent of housing-cost burden shows that relatively fewer households in small apartment properties are impacted severely by rental expenses.

The share of household income spent on housing costs for small properties ranges significantly across the largest U.S. cities. Overall, this share has declined slightly with the ongoing economic recovery, improving affordability in recent years.

In their unit mix, small apartment buildings are more specialized in bigger units compared to large properties, while also being more affordable. Renters can find value in small apartment properties, as examined in this update.

Small property unit demand from the boomer-senior age group is dominated by renters living alone, calling closer attention to property-level upgrades.

Here’s a quick look at the small balance multifamily finance and investment benchmarks for Q1 2018.

Buoyed by the favorable economic outlook, a robust labor market and higher inflation, small balance multifamily lending in Q1 2018 was $44.5 billion, improving on Q1 2017.

Complementing the recent review of household composition and living arrangements, a closer look at householder age indicates the steady graying of small asset apartment demand.