Single-family rental (SFR) conditions strengthened during the first half of 2026, with rents rising across all 50 of the nation’s largest metros between December 2025 and June 2026. Growth was broad-based but uneven, with many Northeast and Midwest markets outperforming major Sun Belt metros.
Lending Activity Accelerates as Loan Maturities Reshape Cap Rates
Arbor Realty Trust’s Small Multifamily Investment Trends Report Q1 2026, developed in partnership with Chandan Economics, shows that lending activity in the sector increased for the second consecutive year amid a sharp increase in refinancings. Even with persistently high interest rates and rigorous underwriting standards, small multifamily entered the first quarter on steady footing.
Key Findings
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Small multifamily originations accelerated in the second half of 2025, rising more than 16% year-over-year, the second consecutive year of increase.
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Cap rates edged higher, driven primarily by refinancing activity.
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LTVs rebounded as credit underwriting conditions continued to normalize.