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.