Origination volume is expected to grow by 3.3% in 2018
The multifamily market is expected to perform strongly throughout the end of the year and well into 2019 as the factors most critical to market strength continue to remain strong, according to the 2018 Mid-Year Outlook released by Freddie Mac Multifamily.
Freddie Mac projects a 3.3% growth in multifamily origination volume to $305 billion this year.
According to the outlook, the past few years have seen fundamentals begin to moderate. However, critical factors such as rents rising above inflation and vacancy rates only increasing slowly remain strong.
“The last months of 2017 exceeded expectations for the multifamily market, and that trend continued into the first half of 2018. Our mid-year outlook finds that this positive progress will help shape the remainder of this year and into 2019,” said Steve Guggenmos, vice president of research and modeling at Freddie Mac Multifamily. “There will be certain submarkets that will see moderation, but overall the multifamily market continues to benefit from a solid macroeconomy and continued strong demand. Simply put, we do not see any looming threats to the multifamily market in the near future.”
Freddie Mac said that its outlook is supported by the market’s strong end to 2017. Lower-than-forecasted vacancy rates and unanticipated rises in rents set up 2018 to benefit. With completions expected to peak sometime in this year, Freddie Mac expects supply to remain elevated throughout 2019.
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