State of Multifamily 5/6/25 - Rent Growth - Construction Demand

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

🔹 Investment Activity: Capital markets picking up after a sluggish 2024. Demographic tailwinds and housing shortage fueling deal flow.

👉 Northmarq Multifamily Report

🌆 Regional Outlook

🔹 Midwest & Northeast: Stronger fundamentals and lower supply risk. Rent growth expected to exceed 3% in many markets.🔹 Sun Belt & Mountain West: Occupancy stabilizing after peak supply; deliveries slowing will support performance.

👉 CBRE Regional Forecast

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