The Biden administration has announced a proposal for a 5% rent cap, despite the fact that rent growth has been markedly below average for the past year-and-a-half, with this rent growth correction finally showing up in the Consumer Price Index and contributing to the milestone monthly deflation recently recorded for June. With lower inflation numbers and some suggestions of impending rate cuts from the Federal Reserve, the multifamily lending market should become more favorable; however, despite optimistic projections for the future of the apartment market, initial rate cuts from the Fed may not alleviate some multifamily borrowers' current distress, which has grown significantly in recent months.

Sources discussed in this episode:

The White House: “President Biden Announces Major New Actions to Lower Housing Costs by Limiting Rent Increases and Building More Homes” - https://www.whitehouse.gov/briefing-room/statements-releases/2024/07/16/fact-sheet-president-biden-announces-major-new-actions-to-lower-housing-costs-by-limiting-rent-increases-and-building-more-homes/

Bisnow: “Multifamily Distress Leaps 185% As Delinquencies Pile Up” - https://www.bisnow.com/national/news/capital-markets/multifamily-distress-leaps-185-as-delinquencies-tick-up-125089

Moody’s Analytics: “It Is Not All About Insurance: Navigating Through Major Expenses for Multifamily Properties” - https://cre.moodysanalytics.com/insights/cre-trends/major-expenses-for-multifamily-properties/

RealPage: “RealPage Forecast Points to Improved Rent Growth in 2025” - https://www.realpage.com/analytics/apartment-forecast-2nd-quarter-2024/

Marcus & Millichap: “Has the Fed Finally Reached a Tipping Point?” - https://www.marcusmillichap.com/research/videos/has-the-fed-finally-reached-a-tipping-point

The Bureau of Labor Statistics: “Consumer Price Index - June 2024” - https://www.bls.gov/news.release/cpi.nr0.htm

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