Multifamily Poised For Another Solid Year

The multifamily market seems poised for another solid year in 2022, according to the U.S. Multifamily Outlook for Winter 2022, released today by Yardi Matrix.

Although record-gaining rent gains are not expected to appear this year like they did in 2021, analysts anticipate that demand for apartments will remain robust, due to strong economic growth and household formation.

Investor activity is also expected to improve its pace as capital conditions look favorable and the multifamily market traditionally offers stable returns and low mortgage rates.

"The economy is benefiting from lingering monetary stimulus, job growth, higher wages and consumer wealth, while supply-chain issues have continued into 2022. Inflation and the labor shortage are the biggest headwinds, but most of the negative ramifications from those matters won't be felt until 2023 or later," states the new report.

Asking rents rose 13.5% nationally in 2021. Meanwhile, anticipated rent growth for 2022 is less than 5%, according to the Matrix. Economic growth is also expected to step back from last year’s 6% increase.

Concerns with oversupply have so far proven to be unfounded and builders are ramping up for new projects nationwide. As of the beginning of 2022, more than 750,000 market-rate apartment units were under construction, with about half expected for delivery this year.