Demand for multifamily housing is strong across the board, as many Millennials, Gen Xers, and Baby Boomers are considering forming renter households. In terms of supply, absorption rates and occupancy levels are exceptionally strong, and tightening construction lending and rising building costs will keep inventory low.
David Brickman, EVP of Multifamily Business for Freddie Mac, writes that 2017 will be a strong year for multifamily housing. He projects that the industry can grow another five to ten percent next year.
When we take these factors together with today's generally strong economy, we project annual new multifamily originations to keep expanding, albeit at a more moderate pace, and reach an estimated $335 billion in 2020. Regarding multifamily mortgage debt outstanding, which reflects current growth in the stock and market value of existing multifamily properties, we expect the market to fund more than $1.8 trillion in new multifamily originations over the next five years.