Cracks in Fundamentals Won't Slow Multifamily

McLEAN, VA-Two organizations, the National Multi Housing Council and Freddie Mac, have released projections about the multifamily market that suggest that demand growth is starting to slacken—but only by a little bit. To be sure, the consensus of both organizations is that demand is still stronger than supply and that supply will find it difficult to play catch up because financing remains constrained.

“Multifamily is still a very solid asset class with strong demand,” NMHC chief economist Mark Obrinsky tells GlobeSt.com. Still, the question hovers in the background: When will supply overcome demand? The best back-of-the-envelope calculation: not for a very long time. “Demand for apartments by residents will increase at a moderate rate for the near term, maybe even for the intermediate term,” Obrinsky says. “I think we have several years of similar kinds of increases that we are seeing now.”