According to the 2024 Multifamily Investment Forecast by Marcus & Millichap, the national multifamily market is experiencing positive momentum. However, vacancy and rent growth rates have not responded accordingly. The report states that developers are expected to open around 480,000 units in 2024, which will add pressure on the market.
Despite this trend, barriers to homeownership remain high due to elevated mortgage rates and stubbornly high sale prices. As a result, many current renters may delay their first-time home purchases.
On the investment sales front for multifamily properties, deal velocity has returned to historical norms after two years of record trading. This is due in part to rising interest rates widening the price expectation gap between buyers and sellers. Additionally,s lower rent growth rates,vacancy levels,and operating costs have also affected seller motivation.
Furthermore,the anticipated influx of properties driven by maturing debt,tighter debt service restrictions,and higher refinance rates has yetto materialize as investors wait for better opportunities.However,Marcus & Millichap predicts that capital will begin gravitating towards multifamily investments at both institutional and private levels.This will facilitate price discoveryand help narrowtheprice expectation gap.
