Slowing construction will likely keep multifamily supply and demand in balance for some time despite fears of a recession, according to some analysts.

“Even if multifamily demand cools, limited multifamily construction will help sustain the sector,” a trio of economists from Moody’s write in a new report, adding that “housing substitutability” can transfer demand to the sector. Would-be owners of single-family homes are opting to rent instead of buy as the average property is now nearly 44% more expensive than in 2019and that in turn is driving increased demand for multifamily units.  It’s also being amplified by the rising short-term rate and the impact of those increases on mortgage rates, and Moody’s notes there are already signs of markets cooling in some of the cities where prices went up most quickly over the course of the pandemic. 

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