U.S. Multifamily Market Snapshot — Q4 2021
The U.S. multifamily market finished 2021 at record-setting highs. Rent growth climbed 12.5% during the year, after falling 2.4% in 2020, and was the highest increase since Moody’s Analytics CRE began tracking the data in 1980. The vacancy rate improved to 4.7%, down from 5.3% at the end of 2020.
Real Capital Analytics reported that sales volume reached a record high of $335.3 billion during the year, shattering the previous high of $193.1 billion in 2019. Cap rates for multifamily transactions averaged 4.5%, down from 5.0% at the end of 2020, and setting a new record low.
Despite a spike in COVID-19 infections to start 2022, the labor market surged in January, adding 467,000 jobs, according to the U.S. Bureau of Labor Statistics. The unemployment rate improved to 4.0%, well below the peak of 14.7%, although it remained above the pre-COVID level of 3.5%. Home prices continued to make headlines, with the national S&P CoreLogic Case-Shiller Home Price Index rising 18.8% year over year in November. However, prices showed signs of slowing amid buyer fatigue.
Here’s a quick look at the U.S. multifamily finance and investment benchmarks for Q4 2021.
For more multifamily market insights, read our latest Small Multifamily Investment Report and check out our other multifamily research.