Multifamily real estate has been on a tear for the past two years. This is not only thanks to 2020-induced rent growth and price appreciation but also due to simple supply and demand. As millennials, a rent-rather-than-own generation, enter into peak homebuying age, many still choose to rent—instead of buy. This presents a unique opportunity for real estate investors, as multifamily demand skyrockets while inventory can barely keep pace.
But rising interest rates are starting to make the housing market look shaky. Is there still a strong demand for multifamily, and if so, how will prices change if financing becomes more expensive while building faces a bottleneck? We’ve brought on Caitlin Sugrue Walter, Vice President of Research at the National Multifamily Housing Council, to give her take on the multifamily investing situation.
Caitlin knows the apartment investing numbers, arguably better than anyone else, and sees some movement on the horizon. She diagnoses exactly what has led to such high demand for apartment rentals, why builders got stuck in developing quicksand, and whether or not rent prices are still poised to increase as we close out 2022. She also hints at the best markets for multifamily investment in the nation and what investors can expect to happen to prices as cap rates begin rising and new interest rates take their toll.
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.