Conditions may not be perfect for multifamily investors right now, but the lending environment and supply/demand fundamentals are lining up for a significant improvements in 2025. With markets currently expecting two more rate cuts before the end of the year, cap rate-interest rate spreads may widen enough to bring more investment activity after a lengthy period in which sales volumes were half the pre-pandemic levels.

Fannie Mae: “Fed Cuts Interest Rates Amid Sluggish Existing Sales but a Rebound in Starts Activity” - https://www.fanniemae.com/research-and-insights/forecast/fed-cuts-interest-rates-amid-sluggish-existing-sales-rebound-starts-activity

Cushman & Wakefield: “Fed Pivots: The Next Chapter for CRE” - https://www.cushmanwakefield.com/en/united-states/insights/fed-pivots-the-next-chapter-for-cre

Cushman & Wakefield: “Unpacking Multifamily Supply Risks and Demand Booms” - https://www.cushmanwakefield.com/en/united-states/insights/unpacking-multifamily-supply-risks-and-demand-booms

Harvard Joint Center for Housing Studies: “Affordability Challenges and the Composition of Middle-Income Renters” - https://www.jchs.harvard.edu/blog/affordability-challenges-and-composition-middle-income-renters

Moody’s Analytics: American Needs More Affordable Housing, Not Just Class A Inventory - https://cre.moodysanalytics.com/insights/market-insights/america-needs-more-affordable-housing-not-just-class-a-inventory/