State of Multifamily 5/6/25 - Rent Growth - Construction Demand - Capital and more
🏘️ Multifamily Market Highlights 🔹 Rent Growth: National rent growth is projected to rise to 2.0%–2.5% in 2025 (up from 1.0% in 2024), fueled by job growth and strong demand from renters aged 20–34. 👉 Fannie Mae 🔹 Vacancy & Demand: Expected average vacancy rate for 2025: 4.9%. Rent growth projected at 2.6% with stronger demand and a shrinking construction pipeline. 👉 CBRE 2025 Multifamily Outlook 🔹 Supply Trends: Construction starts down 74% from 2021 peak and 30% below pre-pandemic average. This will support stronger rent growth into 2026. 👉 CBRE Construction Pipeline 💰 Macroeconomic Indicators 🔹 GDP Forecast: Fannie Mae revised 2025 GDP growth down to 1.7%, citing weak Q1 data and global trade policy shifts. 👉 Fannie Mae Economic Forecast 🔹 Labor Market: February saw 151,000 new jobs added. Unemployment rate: 4.1%, expected to average 4.2% for 2025. 👉 Fannie Mae Employment Data 🔹 Inflation & Rates: Core inflation now projected at 3.3% for 2025. Rates remain elevated, which continues to affect development and acquisitions. 👉 Bass Berry Multifamily Update 🏦 Capital Markets & Investment 🔹 Freddie Mac Forecast: $370–$380 billion in multifamily loan originations expected in 2025, as refinances and sidelined deals return. 👉 Freddie Mac 2025 Multifamily Outlook