Finding Multifamily Investment Opportunities Is Getting Harder

Investment opportunities in multifamily housing lost some steam in Q4 2021, with the Freddie Mac Multifamily Apartment Investment Market Index (AIMI) falling by 4.8% from Q3 and 2.4% year-over-year. AIMI analyzes multifamily rental income growth, property price growth, and mortgage rates to measure multifamily market investment conditions. A decline such as this indicates that attractive investment opportunities are becoming more difficult to find. The report suggests that record multifamily price appreciation and rising mortgage rates offset net operating incomes (NOI), despite “unprecedented” income growth for multifamily investors. Property prices grew by 19.6% YOY, while NOI grew by only 17.7%. “The year-over-year AIMI decline shows us that it may be more difficult now to find attractive multifamily investment opportunities in some…

Multifamily To Remain Strong In 2022

Freddie Mac’s annual multifamily outlook projects another strong year, with rents continuing to increase despite an overall moderating market. The report projects that the Sun Belt will outperform slow-growing smaller markets in the Northeast and Midwest. “We believe the market will continue to grow in 2022, reflecting the strong multifamily fundamentals that drove the market to a record-breaking year in 2021,” said Steve Guggenmos, vice president of Multifamily Research & Modeling at Freddie Mac. “We anticipate rent growth in all markets in 2022 due to strong demand driven by improving economic conditions.” Growth broke records in 2021 thanks to changing migration patterns and strong economic conditions. Multifamily demand reached its highest ever levels during Q2 and Q3 of 2021, and…