WASHINGTON, DC—There is good news and bad news in Freddie Mac's multifamily outlook for the second half of the year. The good news is that the high demand for multifamily product is definitely not a cyclical event but will last into the foreseeable future -- and maybe even become a permanent part of living patterns.

The bad news is that not all markets will benefit from these trends and there are four that Freddie Mac singled out as likely to experience vacancy rates "meaningfully above the long-term average in 2016" or troubled by low oil prices. They are Washington DC, Austin and Houston, Texas and Norfolk, VA.

A Moderating Picture, But Still Good

Right now vacancy rates are between 4.2% and 4.3%, according to REIS figures.

Freddie Mac predicts that vacancy rates will increase to 4.6% by year-end and to 4.9% by the end of 2016. It predicts that gross income growth will remain slightly above the long-run average through 2015 at 2.9% nationally, but could slip below the average by 2016 to 2.4% as vacancies increase and rent growth moderates.

But, says Freddie Mac, because of the ongoing growth in renter household formation, this decline will not signal the start of a downward trend but rather a leveling out from the above-average growth of the past few years.

There will be volatility along the way, but strong growth is expected to continue for several years, it said.

"Rates and income growth will continue to converge toward historic norms over the next few years."

Four Trouble Spots

Now come the exceptions, at least for 2016.

To be sure, this is not to say that the rest of the country is uniform in demand and rental rate growth.

But DC, Norfolk and Austin "will experience declining rent growth and rising vacancy because of the large amount of new supply expected in the short term. If these areas can continue to provide strong job growth, the impact will be minimal and short-lived."

As for Houston, its multifamily market is among those at the greatest risk of economic impact from low oil prices, Freddie Mac said. "With oil prices remaining low lon ger than anticipated at the beginning of the year, we anticipate further slowdown in this market as a result of additional job cuts and decline in investments." The good news, it said, is that because the city has diversified its economy over the years the impact will not be as severe as the 1980s oil bust or the Great Recession.