Multifamily housing fundamentals to see slowdown in growth amid macro factors: Freddie Mac

Aug. 02, 2022 3:05 PM ETESS, AVB, SUI, EQR, MAA, INVHBy: Khyathi Dalal, SA News Editor17 Comments

California Multifamily Homes

JasonDoiy/iStock via Getty Images

  • Freddie Mac sees pace of growth in multifamily fundamentals to start moderating through remaining of 2022 after seeing healthy growth in H1 2022.
  • Rent growth (+16% over the year ending in June) and occupancy will still remain above their long run averages in 2022.
  • "We believe the multifamily industry is well positioned to weather the economic uncertainty and interest rate volatility impacting the broader economy throughout the rest of the year," VP, Multifamily Research & Modeling Steve Guggenmos commented.
  • Tight rental markets suggest that high levels of construction will have a limited impact on the market this year; number of permits and starts remains high, which will keep completions elevated for upcoming years.
  • The Florida and Southwest markets are generally expected to outperform the nation, while the smaller markets in the Midwest and few gateway markets are generally expected to be among the comparatively weaker performers.
  • On the whole, gross income growth in 2022 is forecasted to be ~6.8% and vacancy rates are expected to remain flat at 4.8%.
  • Looking into 2023, vacancy rates are expected to increase modestly to 5.1%, just below the long-term average, while gross income growth will slow to 4.3% but remain above the long-term average of 3.6%.

  • Broader economic concerns like inflation and rising treasury rates are seen pulling down multifamily origination volume to $440-450B compared to its peak levels in 2021 (down 8-10% from 2021).
  • Quick look at some residential REITs: (EQR), (AVB), (MAA), (SUI), (INVH), (ESS)

Recommended For You

Comments (17)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.