Amid ongoing macroeconomic uncertainty, the small multifamily sector remains favorably positioned for stability as the structural need for affordable housing in the U.S. has supported the strength of the sector’s demand profile.
Nationally, vacancies have risen, but the performance of rental housing is extremely localized. Out of the 75 largest U.S. metropolitan areas, the occupancy rate for all types of rental properties, including single-family rentals, 2-4 family, multifamily, and mobile homes, increased in 36 markets last year, while exceeding 95% in nearly one-third of all markets, according to an analysis of newly released U.S. Census Bureau data.[1] From Grand Rapids, MI, to Columbia, SC, the top markets for rental occupancy show where conditions are tightest and demand is strongest.
Arbor’s Single-Family Rental Investment Trends Report Q1 2025, published in partnership with Chandan Economics, is an up-close look at the single-family rental (SFR) sector as it enters a period of normalcy after explosive pandemic-era growth. SFR maintains its balance with the support of a healthy set of fundamentals while capital markets rebound and rent growth moderates.
Small multifamily price growth trends indicate a stabilization may be ready to take hold. Expanding on the findings of Arbor’s latest Small Multifamily Investment Trends Report, our research teams more closely examined valuations to determine if trends in pricing and other fundamentals are supporting a turnaround.
Elevated mortgage interest rates and high home prices boosted demand for single-family rentals (SFR) last year, supporting the growth of rents in almost all of the 100 largest metropolitan areas. Pricing momentum, which averaged 4.5% nationally, was concentrated in affordable markets in the Northeast and Midwest, an analysis of Zillow’s Observed Rent Index data shows.
Increasingly, single-family rental (SFR) operators have been relying on build-to-rent (BTR) development to satisfy their inventory needs. The popularity of BTR communities made economies of scale possible for the SFR sector in the recovery after the 2007 housing crisis and continues to fill a housing need nationwide. Now, newly released U.S. Census Bureau data shows that SFR development activity remained robust even as its momentum slowed, moving the sector into a more stable equilibrium.
With political headwinds reshaping the corporate responsibility landscape, commercial real estate (CRE) leaders, policymakers, and academics recently gathered in New York City for the NYU Stern Chen Institute for Global Real Estate Finance’s 3rd Annual Symposium on Innovation & Sustainable Real Estate to discuss the future of sustainable real estate finance, investment, operations, and technology. In a series of panel discussions, industry leaders offered their perspectives on how sustainability is evolving in a new political environment and why green policies still make business sense.
Rental housing remains uniquely positioned for continued growth in an environment of economic volatility and political uncertainty, Dr. Sam Chandan, founding director of the C.H. Chen Institute for Global Real Estate Finance at the NYU Stern School of Business and founder of Chandan Economics, asserts in his video overview of Arbor’s Special Report Spring 2025.
A panoramic view of how Arbor grows financial partnerships through successful
product executions that deliver results for our clients
Units
Houston
Year Built
A real estate investment firm was exploring a full acquisition of a newly constructed apartment community in Houston, TX. Without an existing asset and with limited operating history in this region, the borrower sought expert guidance to develop a strategy to acquire the property. With interest rates rising, the borrower wanted to lock in a highly competitive rate to refinance a rental community that had swelled to over 90% capacity.
Arbor worked with the U.S. Department of Housing and Urban Development (HUD) to secure an FHA 223(f) loan refinance with green savings, which provides long-term, fixed-rate financing for refinancings, acquisitions, or moderate renovations. Arbor negotiated an underwriting change while interest rates were increasing, allowing the borrower to secure a Bridge to HUD loan to help improve net operating income and increase loan proceeds. In addition, Arbor connected the borrower with HUD’s green program, which reduces existing loan interest rates.
The borrower secured a Bridge to HUD loan that funded the acquisition of a beautiful and sprawling Houston apartment community with wide-ranging amenities. They achieved a better-than-anticipated rate for their HUD execution. The apartment community, constructed to meet high energy efficiency and sustainability standards, was then entered into HUD’s green program, reducing mortgage insurance premiums enabling the borrower to achieve optimal savings.