Until recently, full-scale optimization has skipped over the basic monthly rental payment transaction, with 78% of more than 100 million renters using paper checks. But now, two programs, backed by global leaders in financial services, are incentivizing tenants to pay the rent on credit, with perks like automatic credit reporting and points towards future purchases.
Renters 30 years of age and under, who now make up slightly more than one-quarter of the heads of households of rental units, are bolstering housing demand in markets known for their affordability and livability.
Multifamily investing involves the purchasing of properties with rentable housing units. In these types of investments, a group of investors often works together to mitigate costs, split profit shares, and reduce risk. Multifamily properties include apartment complexes, condo buildings, and townhouses, among other property types. When investing in multifamily properties is researched and undertaken prudently, it can generate steady and reliable income streams in all economic cycles.
After taking a pause during the peak of the COVID-19 pandemic, the U.S. multifamily market experienced a banner year in 2022. Throughout the year, Arbor continued to provide unique research and insights into our markets. Here’s a look at our top Arbor research articles from 2022, in case you missed them.
As we move into 2023, all eyes will once again be on the Federal Reserve, the job market, and the housing market. Investors who are in a good position going into the correction will be able to take advantage of opportunities.
Driven by cyclical, demographic, and technological factors, the single-family rental (SFR) sector has matured over the past decade. The once-fragmented industry has both coalesced and professionalized. While the evolution of the SFR sector has been explored at length, a clear picture of its core set of tenants is just now coming into focus.
The Federal Housing Finance Agency (FHFA) announced a $6 billion rollback of Fannie Mae and Freddie Mac’s volume cap for loan purchases for 2023 to $150 billion ($75 billion for each agency) as multifamily transaction activity has declined in 2022. FHFA also added new provisions to its mission-driven lending initiative designed to increase investment in affordable and workforce housing, two sectors with significant growth potential in a tight housing market.
Arbor Chairman and CEO Ivan Kaufman kicked off the first full day of eCore22 in Miami this November with an informative and intimate panel discussion, featuring Charles Ostroff, SVP Multifamily Chief Credit Officer at Fannie Mae, Robert Verrone, Principal at Iron Hound Management Company, and Aaron Kurlansky, Principal at Sheridan Capital, that covered the most pressing economic issues of the moment.
Multifamily rent growth for the U.S. overall was up 12.5% during 2021, the largest annual gain since REIS began tracking data in 1980. As was the case throughout the year, Florida markets were found up and down the list of top rent growth markets.
Despite a slow start to 2021, the U.S. multifamily market posted a record-breaking year. Rent growth was the highest since REIS began tracking data in 1980, as vacancy rates continued their downward trend. Investment sales also shattered previous records, while cap rates remained near historic lows and below those of other major property types.
The single-family rental sector (SFR) enjoyed its best year on record in 2021, as demographic and pandemic-related forces combined with growing investment enthusiasm. This report provides an in-depth look at the SFR market with exclusive data and analysis on its performance.
Even as the Omicron variant evades our collective vaccine protection and prompts recalibrated expectations for the new year, our economic sensitivity to the viral threat is markedly less than it was in spring 2020. A potential outcome is the pandemic will gradually fade into a highly contagious though comparatively manageable endemic through this upcoming year and beyond.
The initial year-end 2021 estimate of new multifamily lending volume on loans with original balances between $1 million and $7.5 million1 — including loans for apartment building sales and refinancing — surged to $85.4 billion. The estimate is a substantial step-up from previous 2021 annualized estimates, reflecting a sizable increase in originations at the end of the third quarter through the end of the year.
The general sentiment of the 2022 NMHC Annual Meeting seemed positive—reflecting strong performance of multifamily assets, high transaction volumes through 2021, and optimism for a good year ahead. Of the many dynamic topics presented on-stage and overheard in the corridors during the 2022 NMHC Annual Meeting, three that merit special mention and industry consideration for the year ahead are: shifts in renter preferences, rent control, and institutional excitement for single-family rentals.