Yardi: U.S. Multifamily Market Outlook – Summer 2024

A strong economy boosts multifamily, but high deliveries, capital markets, and interest rates pose challenges. Here’s Yardi Matrix’s Mid-Year Outlook for 2024.

Yardi: U.S. Multifamily Market Outlook – Summer 2024

A strong economy boosts multifamily, but high deliveries, capital markets, and interest rates pose challenges. Here's Yardi Matrix’s Mid-Year Outlook for 2024.

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Good morning. Multifamily performance remains strong, driven by job growth and immigration, though key metrics like rent growth and occupancy have declined since their peak in 2022.

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Market Snapshot

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*Data as of 6/14/2024 market close.

Yardi Matrix

U.S. Multifamily Market Outlook – Summer 2024

A strong economy and growing demand are boosting multifamily fundamentals, but high deliveries, capital markets, and interest rates pose challenges. Today, we dive into Yardi Matrix’s Multifamily Mid-Year Outlook for 2024.

Higher for longer: The U.S. economy is showing positive signs of life with strong job growth and consumer spending. GDP grew by 1.3% in Q1 2024, with employment levels rising. However, inflation concerns and stress on lower-income households persist. The Federal Reserve is unlikely to cut rates significantly in the near term, says Yardi, maintaining higher mortgage rates that benefit rental demand but strain property sales and refinancing.

Source: Yardi

Rent growth is weak: National rent growth is projected to be modest, with a full-year increase of 1.7%. Regions like the Midwest and Northeast show steady rent increases, while the Sun Belt faces pressure from a high supply of new units. Affordability issues are also curbing rent hikes, especially in luxury units.

  • YTD Rent Growth: U.S. asking rents increased by $19, or 1.1%, in Q124

  • Regional Leaders: Columbus (+3.1%), Northern New Jersey (+2.7%), and Kansas City (+2.5%) are forecasted to lead rent growth

Supply surge: A record 553,000 new units are expected to be completed in 2024, predominantly in high-growth areas like the Sun Belt and Mountain West. Dallas-Fort Worth (32,600 units), Austin (24,600 units), and Phoenix (23,400 units) lead in expected deliveries. This surge will taper off as construction starts decline due to high financing costs.

Transaction activity: Through mid-May, $19.3 billion in multifamily transactions were recorded, 24% below the previous year. Transaction volumes remain low, with sellers holding out for lower rates. Multifamily mortgage rates range from 5.5% to over 7%, affecting deal flows. Extensions are common as borrowers and lenders navigate the high-rate environment, though distress is rising in value-add properties financed with short-term debt.

  • Loan Delinquencies: Non-current multifamily loan rates doubled to 0.3% in 2023, still low compared to the 4.7% peak after the GFC.

Lending market: Small and medium-sized banks are cutting back on real estate exposure to avoid defaults, while larger banks extend existing loans instead of issuing new ones. Despite slower property sales and more loan extensions, Yardi says debt sources for multifamily investments remain abundant.

  • GSE Activity: Fannie Mae and Freddie Mac are focusing on deals with affordable and green components, although they are unlikely to use their full $70 billion annual allocations. In Q1 2024, GSE multifamily volume dropped to $19.2 billion from $27.1 billion in Q4 2023.

  • Debt Funds: These funds have significantly increased their market share, now originating around 30% of multifamily loans in 2024. They are filling gaps in financing, especially for highly structured deals.

  • CMBS Issuance: CMBS issuance is coming back and has risen by 154% year-over-year, reaching $33.6 billion by the end of May 2024.


Waiting for rates to fall: U.S. multifamily rent growth and occupancy have declined since their 2022 peak. Yardi Matrix's 2024 Outlook predicts further deceleration, with rent growth at 1.7% for the year, much lower than the 24% gain in 2021-2022. High interest rates hinder capital markets, and the Federal Reserve's cautious stance prolongs these challenges.


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✍️ Editor’s Picks

  • Record loan: PMG secured a record $668 million construction loan for Miami's Waldorf Astoria Residences, surpassing Florida's previous high of $600 million for the Cipriani Residences.

  • Job’s recovery: U.S. Treasury Secretary Yellen said that the job market is returning to pre-pandemic conditions, with decreased job openings and moderated wage growth reducing inflation.

  • Moving forward: The Tampa Bay Rays and Hines advance a $1.3 billion mixed-use development in St. Petersburg, including a new stadium and 5,400 residential units.

  • Flood protection: As Miami faces severe flooding, officials finalize a $2.7B plan to protect the city from storm surge, aiming for Congressional approval this year.


  • Digging into distress: Distressed buyers are frustrated as value-add deals and construction loans in Sunbelt markets struggle despite loan extensions.

  • Preleasing Slows: Student housing preleasing is slowing despite rent growth, with federal financial aid processing issues likely to blame.

  • Short-Term Rentals: Multifamily buildings are adding short-term rentals to boost cash flow and attract nomadic tenants.

  • Foreclosure: Arbor Realty forecloses on Northbrooke Apartments in Houston after owner Northbrooke SPE defaults on a $32.5 million loan.

  • High-risk housing: A recent ATTOM report highlights that California, New Jersey, and Illinois are home to the majority of counties that are at risk of slowing down the housing market.

  • San Jose acquisition: Reliant Group acquires the 160-unit Moreland Apartments in San Jose for $71 million, financed with $73.9 million from Citibank and Reliant Cap X.

🏭 Industrial

  • Clean power: Google is partnering with Fervo Energy and NV Energy to power its data centers with 115 megawatts of geothermal energy, pending state regulatory approval.

  • Milestone: Prologis launches its first 10-megawatt battery storage project in Texas at an Arlington warehouse, with more projects planned in Houston and Grand Prairie.


  • Batch of tenants: Levcor's Post Oak Plaza in Uptown Houston secured five new leases, bringing occupancy to 98%.

  • Brick-and-Mortar: Revolve Group, an online fashion retailer targeting millennials and Gen Z, opens its first permanent physical store, joining other digital-native brands in the push.

  • New ordinance: Chicago mandates landlords register, maintain, and insure buildings with vacant storefronts to address rising retail vacancies and revitalize business districts.


  • Lender seize: Bank of the Sierra forecloses on a 10-story office building in Downtown Oakland after HP Investors defaulted on a $9.1 million loan, acquiring the property for $4 million.

  • New tenant: Ziff Davis signs a 23,038-square-foot lease at 360 Park Ave. S., relocating its corporate offices to the 17th floor of the Manhattan Class A building.

  • Uncertain demand: Denver's newest office development launches amid high vacancy rates and dwindling demand for space in the city.


  • Fire sale: Ashford Hospitality Trust sold two Kennesaw, GA hotels for $17.5 million, using proceeds to pay down a $10.8 million mortgage and for general corporate purposes.

  • Staffing struggles: Despite labor market improvements since the pandemic, PM Hotel Group CEO Joseph Bojanowski says staffing hotel operations remains a significant challenge.


U.S. hotel performance saw a notable weekday surge in early June, with a 1.7% year-over-year RevPAR increase driven by higher average daily rates, though overall occupancy remains below 2019 levels.

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