Multifamily Housing 2025 Outlook Roundup: Experts Weigh In

January 14, 2025

To kick off the new year, we’ve assembled a rundown of some of the top forecasts for the multifamily housing industry in 2025.

“With continued solid fundamentals, multifamily is the most preferred asset class for commercial real estate investors in 2025.”
“For all the short-term negative effects brought on by rising interest rates and record levels of new supply, strong renter demand will drive improving occupancy and accelerating rent growth. This in turn will lead to increased multifamily investment activity.”
“As the construction pipeline shrinks, strong renter demand will lower the vacancy rate and precipitate above-average rent growth in 2026.”

For details, visit the CBRE report: CBRE Multifamily Outlook 2025

“The multifamily sector is well-positioned for 2025, benefiting from a slowdown in new deliveries and the increasing cost of home ownership. However, as in other capital market segments, deal activity will be tempered without a significant drop in long-term interest rates.”
“The movement of the 10-year Treasury will go a long way to supporting the health of the multifamily market. If rates come down, it will unlock additional capital, driving volumes even higher. If they don’t, housing will remain prohibitively unattainable for many households, supporting rental demand. This isn’t an either/or scenario.”

“After reaching a 40-year high of 692,000 apartment units added in 2024, expected completions of new units in 2025 will likely decline by 50% to the mid-300,000 range.
“At the same time, demand appears poised to remain above 400,000 units if economic growth remains steady and potential new renters feel confident about signing a lease.”
“Overall, the year ahead has the potential to reverse three years of stagnating rent growth in the multifamily sector, transitioning to conditions conducive to increase rents by the second half of the year.”

For details, visit the Co-Star article: CoStar Insight: What to watch in 2025

“The multifamily market enters 2025 in good shape, after several years of strong demand in most markets and expectations that interest rates are likely to decline. The economy continues to grow, the employment picture remains solid despite some cooling, and consumers are spending in line with high confidence levels.”
“Changes will be in the cards, though, as the incoming Donald Trump administration will implement a new policy course. Some campaign policies such as relaxing regulations, eschewing rent control and reducing taxes should have a positive impact on multifamily. However, tariff threats and promises of large-scale deportations could raise prices and lower apartment demand.”
“The large number of properties under construction will support robust supply growth again in 2025, but the dwindling number of starts will stifle deliveries in 2026 and 2027.”
“Supply growth is distributed unevenly, as 12 to 15 high-growth markets account for a large percentage of deliveries. At the same time, a national housing shortage has built up over decades, making development necessary to address affordability.”

“Next year (2025) should represent a return to the norm for the apartment market, as strong demand continues to manage the near-term supply wave and fundamentals stabilize.”
“Declining interest rates, plus a market with much friendlier prices than in the early part of the decade, should yield a return to normal for the capital markets.
“That said, quality operators will yield the strongest market results, as supply continues to create competition for new tenants and distress spreads through the least-well-operated buildings.”

Explore expert insights on the next decade of multifamily housing—watch our "Essential Housing 2035" webinar here.

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