There's a lot of anticipation about the Federal Reserve potentially lowering interest rates. Markets have been pricing in more 2024 reductions than seem likely to occur.

But according to CBRE, multifamily markets haven't jumped on a second coming of Alan Greenspan's "irrational exuberance." Instead, their "unlevered internal rate of return (IRR) targets, going-in cap rates and exit cap rates for prime multifamily assets increased slightly in Q4. Across-the-board decreases are expected once the Fed begins cutting interest rates, likely by midyear."

Assuming, of course, that inflation doesn't continue the upward bounce that December saw and that conditions continue to give the Fed reasons to keep thinking rate reductions.

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