This year’s data show that while multifamily completions moderated from 2024’s elevated pace, the sector’s shift toward larger properties continued. At the same time, larger has not necessarily meant taller, as lower-rise buildings continue to account for most new multifamily completions.
Special Report: Fall 2023
Although headwinds persist, solid national economic growth and the strength of multifamily fundamentals indicate it’s time to recalibrate for a soft landing, writes Ivan Kaufman, Arbor’s Chairman and CEO, and Sam Chandan, Founding Director of the C.H. Chen Institute for Global Real Estate Finance at the NYU Stern School of Business. Historically stable in times of adversity, the rental housing market is well-equipped to thrive in today’s evolving economic environment.
Key Findings:
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Despite a slowdown in new investment, the macro economy has outperformed expectations in 2023, indicating a soft landing is more likely.
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A yield curve normalization could place additional upward pressure on long-term interest rates and cap rates into 2024.
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While local challenges in select rental markets are meaningful, the multifamily sector remains structurally sound and well-positioned to limit distress on a national level.