U.S. Multifamily Market Snapshot — Q2 2022
The U.S. multifamily market posted a historic showing in the second quarter of 2022. According to Moody’s Analytics CRE, average effective rents increased 17.5% year-over-year, up from 15.7% in the previous quarter, and the highest quarterly growth rate on record. Rents are forecasted to increase 7.0% for 2022. The vacancy improved to 4.5%, the lowest level since the onset of the pandemic.
Real Capital Analytics reported multifamily sales volume totaled more than $350 billion during 2021, shattering previous records. The trend continued through the first six months of 2022, with more than $150 billion in sales, on pace to set another record high. Cap rates remained at historic lows, averaging 4.3%, down slightly from 4.5% for 2021. Multifamily cap rates remained the lowest among major property types. Property values increased 18.5% year-over-year, according to the RCA CPPI™.
According to the U.S. Bureau of Labor Statistics, a total of 3.3 million jobs were gained through the first seven months of the year, and total employment finally rose above the pre-pandemic level. The unemployment rate improved to 3.5%, even as job openings continued to climb. Home prices continued their rapid ascent, rising 19.7% year-over-year. However, the housing market continued to show signs of slowing amid affordability constraints and limited inventory.
Here’s a look at the U.S. multifamily finance and investment key benchmarks for Q2 2022.