While the single-family rental (SFR) sector’s rent growth averages have retreated from record highs, structural tailwinds are keeping price growth positive — both nationally and in major SFR markets. In this research brief, Chandan Economics and Arbor Realty Trust analyze DBRS Morningstar data, which covers the top 20 MSAs by SFR activity, to discover the metropolitan areas where SFR rent growth is the hottest right now.
Fannie Mae recently announced that its Small Loan cap has increased from $6 million to $9 million for all loans committed as of August 22, 2023. Multifamily borrowers and lenders have praised the change to the Fannie Mae Small Loans program, which will encourage greater investment in a rapidly growing sector where demand remains high despite market volatility.
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.
As Baby Boomers reach retirement age, their evolving geographic preferences are strengthening housing markets and local economies in new locations, which feature attractive climates, relative affordability, and ample outdoor activities. With swelling populations of senior citizens, our top five emerging metropolitan areas for retiree relocation are fertile ground for multifamily real estate investment.
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More than halfway through 2023, the single-family rental (SFR) sector continues to demonstrate why it deserves the attention of multifamily investors. Arbor’s Single-Family Rental Investment Trends Report, developed in partnership with Chandan Economics, provides an inside look at this high-performing sector where SFR/build-to-rent (BTR) construction starts are breaking records amidst the ongoing challenges of elevated interest rates, tighter underwriting standards, and historically high cap rates.
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.
Arbor’s roots are in small multifamily, and Chatter is your source for small multifamily news, research and insight. With nearly a third of all renters calling a property with between 5 and 50 units home, we’re dedicated to keeping you informed on the best practices for investing, financing and running smaller apartment communities.
Small multifamily promotes greater accessibility to housing for workforce households than large multifamily. About 62% of all small multifamily households made less than $50,000 annually.
Renter income growth In small multifamily properties was slightly above the national average, while large multifamily households saw market-leading gains.
Small multifamily rents have been growing faster in metro areas with rent levels below the national average. This phenomenon has, by and large, also been true for the large multifamily asset class.
Four major California cities were the most expensive areas in the nation for small multifamily rentals, reflecting the state’s ongoing affordability crisis.
Small multifamily rent growth is fueled by the asset class’ proximity to job centers, larger unit sizes and relative affordability to other rental property types.
Small multifamily properties are growing the quickest as a share of rental inventory outside of the largest U.S. metro markets.
While the majority of U.S. rentals are located in a handful of large metros, small multifamily is growing the quickest in smaller U.S. metros.
An attractive combination of affordability, location diversity and larger unit sizes are giving the small multifamily asset class broad appeal.
Small multifamily plays a critical role in offering more affordable rents in Greater Los Angeles, as housing affordability remains a concern in the region.
Annualized small multifamily lending volume reached $57.8 billion in Q3 2019. Here’s a quick look at the quarter’s small multifamily investment and finance benchmarks.