In this video, Dr. Sam Chandan, Founding Director of the C.H. Chen Institute for Global Real Estate Finance at the NYU Stern School of Business and non-executive chairman of Chandan Economics, details the key takeaways of Arbor’s Special Report Fall 2023, which he co-authored with Ivan Kaufman, Chairman and CEO of Arbor Realty Trust.
The Federal Housing Finance Agency (FHFA) announced a $10 billion rollback of Fannie Mae and Freddie Mac’s volume cap for loan purchases for 2023 to $140 billion ($70 billion for each agency). This move aligns with industry expectations, given the anticipation of continued headwinds for the multifamily in 2024. Next year’s cap for the Government-Sponsored Entities (GSEs) is a reduction of approximately 7% from the $150 billion limit set for 2023 and a return to the level it was in 2021.
With the cost of living climbing, the need for affordable housing has become more urgent. Although demand continues to outpace available supply, multifamily investment in affordable housing is fortified by Low-Income Housing Tax Credits (LIHTC), Project-Based Section 8, and the Housing Choice Voucher (HCV) programs. Arbor’s Affordable Housing Trends Report Fall 2023, developed in partnership with Chandan Economics, examines the supply-driven programs and policies designed to improve supply at a point in time when federal gridlock has stalled many funding increases.
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.
FANNIE MAE® Workforce Housing Social Impact Financing: Sponsor-Dedicated Workforce Housing (SDW) V103123
FANNIE MAE® Workforce Housing: Sponsor-Initiated Affordability (SIA) V103123
Arbor’s Small Multifamily Investment Trends Report Q4 2023, developed in partnership with Chandan Economics, is a snapshot of a strong and resilient subsector continuing to navigate ongoing market dislocation. The report shows that distress has remained limited, even with valuations and measures of risk pricing in flux. As conditions start to stabilize, there are signs that deal activity is picking up.
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.
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.