Optimism for the 2024 Multifamily Market

Optimism for the 2024 Multifamily Market

The 2024 multifamily market is generating optimism, with the Federal Housing Finance Agency (FHFA), Federal Reserve, and Freddie Mac indicating a potential increase in transaction volume after a sluggish 2023.

Adjustments to lending caps: The FHFA has set the 2024 multifamily lending caps for Fannie Mae and Freddie Mac at $70 billion each, totaling $140 billion for the year. This adjustment is based on current market forecasts, with the possibility of cap increases if needed. Unlike in 2023, loans supporting workforce housing will be exempt from these volume caps, indicating an expectation of increased lending activity in this sector.

Increased transaction volume: Echoing this sentiment, industry experts like Scott Belsky from Partner Valuation Advisors predict a surge in multifamily transactions. This optimism is fueled by factors such as the maturing of loans issued between 2020 and 2022, the stabilization of interest rates, and a narrowing of the bid-ask spread in the market. The Mortgage Bankers Association supports this view, projecting a 26% increase in overall lending and a 19% rise specifically in multifamily transactions, hinting at an active and prosperous healthy landscape for the year ahead.

Freddie Mac’s outlook: Despite predictions of persistently high interest rates, Freddie Mac anticipates stabilization is likely to catalyze lending activities. The multifamily market is also braced for sustained growth, driven by an overarching housing shortage, expensive for-sale housing market conditions, and a growing pool of new renters.

Supply surge: On the flip side, Yardi Matrix 2024 outlook for multifamily brings a unique perspective to this optimistic scenario, highlighting upcoming rent growth and occupancy challenges. With 1.2 million apartment units under construction at the beginning of 2024, a record-breaking 510,000 units are projected to be completed by year’s end.

“We expect demand for multifamily to remain healthy in 2024, but headwinds that include slower job growth, increasing supply and waning affordability in some markets will keep rent growth restrained again,” state analysts, forecasting a tepid 1.5 percent rent growth nationally.”

Top movers: Looking at regional trends, the Midwest is poised to lead in rent growth, while the Sunbelt and Western regions continue to draw both residents and businesses away from the coasts. However, in Sunbelt cities such as Austin, Nashville, Charlotte, and Orlando, the influx of new housing supply is expected to temper rent increases despite robust demographic and economic growth.


Zoom out: In 2024, the multifamily market is expected to remain robust, driven by strong demand and a resilient economy. However, challenges like rising interest rates and a surge of supply in some markets could temper growth. On the investment front, already down by 70% YoY, multifamily sales will likely pick up in 2024 due to the impact of interest rates and dry powder on the sidelines.