Multifamily is leading the slide as prices, sales volumes, and rent growth continue to falter.
Pricing pressure: According to MSCI Real Assets, multifamily property prices fell 1.5% from March to April and a sharp 12.1% year-over-year—marking the steepest annual drop since the 2008 financial crisis. The rate of change in pricing momentum has continued to deteriorate since market peaks in 2022, signaling broader instability in the sector.
Sales volume slips: Transaction volume in May fell 18% year-over-year to $8.2 billion, snapping an 11-month streak of double-digit growth. Sales of garden-style apartments plummeted 30%, while mid- and high-rise assets managed a 3% gain. Single-asset deals declined 17%, and portfolio or entity-level transactions dropped 23%. Lower prices and fewer deals are combining to shrink the market.
Flatlining: Multifamily rent trends continue to disappoint. According to Markerr, rents have now declined modestly for 23 consecutive months, defying seasonal expectations for stronger summer growth. New supply has played a major role, keeping rent growth subdued despite relatively favorable year-over-year comparisons.
Supply pipeline still full: Although new construction starts are slowing, completions are still rising. Yardi Matrix revised its forecast upward, projecting completions to grow 3.3% in 2025 and 11.5% in 2026. RealPage data suggests permitting and starts may have bottomed, but the existing pipeline will keep pressure on rents.
➥ THE TAKEAWAY
Big picture: Multifamily fundamentals are still out of balance. Prices are dropping, rents are stagnant, and new supply isn’t slowing fast enough to stabilize the sector.
By CRE Daily