2024 Multifamily National Investment Forecast

2024 Multifamily National Investment Forecast

Marcus & Millichap’s annual forecast highlights key trends and factors influencing the multifamily real estate market in the United States.i Here are the key points from the new report:

National Economy

  • Despite initial concerns, the economy performed robustly over the previous year, surprising most economists. Real GDP growth is estimated to have topped 2.0 percent in 2023, while maintaining low unemployment.
  • Household net wealth has increased significantly, but the cost of debt outpaced the growth last year, constraining activity in both residential and commercial real estate markets.
  • However, if higher borrowing costs persist, rising operating expenses may lead to employers doing more with less, affecting job growth. Despite this concern, a “soft landing” is the consensus outlook.

Capital Markets

  • The Federal Reserve ended its aggressive hiking spree and is expected to cut rates at some point in 2024.
  • Underwriting criteria for multifamily investment sales have tightened, and borrowing costs are high.
  • Investors are highly dependent on lending from government-sponsored agencies, and the lending climate remains tight.
  • Just over 10 percent of outstanding multifamily debt as of early 2023 was set to mature in 2024.
  • The FDIC provided guidance to banks to offer loan accommodations, mitigating potential commercial real estate debt stress.
  • CMBS loan delinquency rates were under 5 percent as of late 2023, with strong renter demand outlook tempering broader distress concerns.

Housing Market Dynamics

  • Limited listings constrain sales after a surge in home prices and interest rates.
  • The affordability gap between buying and renting has widened, keeping many renters in apartments for longer.
  • High ownership costs underscore the appeal of rentals.
  • Groundbreakings have surged due to remote work, especially in Sun Belt markets.
  • Developers are on track to open approximately 480,000 doors in 2024, marking a cyclical peak for development.
  • Some traditionally steadier markets are standing out, with comparatively modest construction aiding fundamentals.

Investment Outlook

  • The multifamily investment sales climate has realigned with historical norms after two years of record trading.
  • Slower rent growth, elevated vacancy rates, and higher operating costs have weighed on seller motivation.
  • However, the prospect of flat or modestly declining interest rates in 2024 should boost investor activity, with a focus on value creation.
  • Further, elevated mortgage rates and high sale prices are delaying first-time home purchases, expanding the rental pool.


  • Location is Supply/demand ratios continue to be an important factor in targeting markets for investment.
  • The relatively high cost of homeownership will continue to support demand for rental housing in many markets.
  • Capitalization rates for multifamily investments, of course, are impacted by interest rates, but factors such as available investment capital, perceived operating risk and overall household income growth also contribute to the “spread” between interest rates and cap rates.
  • The potential for apartment communities to generate positive NOI growth over time serves as a hedge against rising cap rates, especially compared to properties subject to long-term leases with nominal rent increases.


i https://www.marcusmillichap.com/research/market-report/multiple-markets/2024-us-multifamily-investment- forecast

This is for informational purposes only, does not constitute individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance. Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. 1031 Capital Solutions is independent of CIS and CAM. bd-bk-gp-a-199-2-2024

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