Multifamily investment optimism persists, but expectations have cooled somewhat since late 2024. Persistently-high ten-year treasury yields have changed the prevailing assumptions about interest rates and the multifamily lending market, with higher-for-longer expectations taking hold, moderating the previous optimism about the multifamily investment market, but even if the lending environment remains the same, the near-unanimous consensus of improved rent growth and apartment fundamentals continues to support the strong investment prospects for multifamily, no matter how cold the wind may blow.

Amid the steady flow of executive orders from the new Trump administration, there remains some lingering uncertainty about the direction of the economy, but nothing that has overcome the prevailing economic optimism presently. The apartment market, while still working through a massive wave of new supply, has a clear positive trajectory for 2025, backed by high housing demand and an interest rate environment that continues to favor renters over homebuyers.

Population growth, inflation, and increasing demand for apartments point to continued economic heat at the start of 2025, but the pressures of debt costs have also risen as the CRE market comes to terms with the prospect of continued high interest rates.

Amid news of a powerful upswing in apartment demand, rising investor interest, and increasing consumer confidence, the rising yields for 10-year treasuries are a dark cloud that promises to make CRE investment interesting, if not straightforwardly difficult for investors looking for a larger spread between cap rates and debt costs. Likewise, CRE borrowers with loan maturities in 2025—perhaps even some who faced loan maturities in 2023 and were already granted extensions from their lenders—could face an even tougher path. There is optimism among multifamily investors, but 2025 will have its share of challenges alongside opportunities.

Sources discussed in this episode:

RealPage: “Resounding Appetite for Apartments Overtakes Oversupply Fears in 4th Quarter 2024” - https://www.realpage.com/analytics/4q-2024-data-update/

Harvard Joint Center for Housing Studies: New Projections Anticipate a Slowdown in Household Growth and Housing Demand” - https://www.jchs.harvard.edu/blog/new-projections-anticipate-slowdown-household-growth-and-housing-demand

Cushman & Wakefield: “​​10 Critical Questions for 2025” - https://www.cushmanwakefield.com/en/united-states/insights/10-critical-questions

MSCI: “Investment Trends in Focus: Key Themes for 2025” - https://www.msci.com/www/research-report/investment-trends-in-focus-key/05245039511

Moody’s Analytics: “Q4 2024 Preliminary Trend Announcement” - https://www.moodyscre.com/insights/cre-trends/q4-2024-preliminary-trend-announcement/

For the latest multifamily news from across the internet, visit the Gray Report website: ⁠https://www.grayreport.com/⁠

Download Gray Capital's latest report: ⁠https://www.graycapitalllc.com/report/⁠

Sign up for our free multifamily newsletter here: ⁠https://www.graycapitalllc.com/newsletter⁠

DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

The Gray Capital team discusses investor and consumer sentiment at the start of 2025, explaining the different trends and expectations for the multifamily market and the economy.

Sources discussed in this episode:

John Burns Research and Consulting: “Commercial real estate optimism is rising, namely apartments” - https://jbrec.com/insights/investors-optimistic-about-commercial-real-estate-aparments-for-2025/

The Conference Board: “US Consumer Confidence Pulled Back in December” - https://www.conference-board.org/topics/consumer-confidence

University of Michigan: “Index of Consumer Sentiment” - http://www.sca.isr.umich.edu/

RealPage: “2025 Apartment Industry Predictions” - https://www.realpage.com/analytics/apartment-market-predictions-2025/

CoreLogic: “Unpacking 2024 Housing Market Trends” - https://www.corelogic.com/intelligence/2024-housing-market-reviewed/

For the latest multifamily news from across the internet, visit the Gray Report website: ⁠https://www.grayreport.com/⁠

Download Gray Capital's latest report: ⁠https://www.graycapitalllc.com/report/⁠

Sign up for our free multifamily newsletter here: ⁠https://www.graycapitalllc.com/newsletter⁠

DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

The Gray Capital team reviews the shifts in housing and multifamily at the transition from 2024 to 2025.

Sources discussed in this episode:

Cushman & Wakefield: “The Tide Is Turning For CRE” - https://cw-gbl-gws-prod.azureedge.net/-/media/cw/americas/united-states/insights/research-report-pdfs/2024/122024chiefeconomistsperspectivev2.pdf?rev=14b033774366436f9b2b3e49f45c1beb&hash=4A92E1939002FB3489EB5122D66A2000

Freddie Mac: “Homeowner vs. Renter Spending” - https://www.freddiemac.com/research/forecast/20241220-us-economy-remains-robust-with-strong-q3-growth

RealPage: “Class A Price Premium Smallest in High Supply Submarkets” - https://www.realpage.com/analytics/rent-premiums-high-supply-submarkets/

For the latest multifamily news from across the internet, visit the Gray Report website: ⁠https://www.grayreport.com/⁠

Download Gray Capital's latest report: ⁠https://www.graycapitalllc.com/report/⁠

Sign up for our free multifamily newsletter here: ⁠https://www.graycapitalllc.com/newsletter⁠

DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

Spencer Gray and Matt Bastnagel of Gray Capital discuss their expectations for the multifamily market in 2025, with comments on existing and future trends in the multifamily investment market, housing, and the economy.

We comb through the multitude of predictions for the multifamily market in 2025, with comments on apartment supply timelines, interest rates, housing demand, and other important factors.

Sources discussed in this episode:

Marcus & Millichap: Marcus and Millichap 2025 Multifamily Outlook - https://www.marcusmillichap.com/news-events/events/marcus-millichap-events/2025-multifamily-investment-outlook

NAA: 2025 Apartment Housing Outlook - https://www.naahq.org/2025-apartment-housing-outlook

NAHB: “A New Status Quo for the Geography of Residential Construction?” - https://eyeonhousing.org/2024/12/hbgi-q3-2024-a-new-status-quo-for-the-geography-of-residential-construction/

For the latest multifamily news from across the internet, visit the Gray Report website: ⁠https://www.grayreport.com/⁠

Download Gray Capital's latest report on multifamily loan maturities: ⁠https://www.graycapitalllc.com/report/⁠

Sign up for our free multifamily newsletter here: ⁠https://www.graycapitalllc.com/newsletter⁠

DISCLAIMERS: This podcast does not constitute professional financial advice and is for educational/entertainment purposes only. This podcast is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

Gray Capital President and CEO Spencer Gray speaks with Chief Investment Officer Jay Reeder about the current state of the multifamily market, prospects for the future, and the impacts of supply trends, affordability and interest rates on the apartment market and housing as a whole.

Sources discussed in this episode:

RealPage: “Scheduled Apartment Supply Peaks by Market” - https://www.realpage.com/analytics/expected-supply-peak-by-market/

Apartment List: “National Rent Report, November 2024” - https://www.apartmentlist.com/research/national-rent-data

Moody’s Analytics: “Housing Affordability and Emerging Affordability Concerns in Student Housing” - https://www.moodyscre.com/insights/cre-trends/q3-2024-housing-affordability-update/

Harvard Joint Center for Housing Studies: “Housing Cost Burdens Climb to Record Levels (Again) in 2023” - https://www.jchs.harvard.edu/blog/housing-cost-burdens-climb-record-levels-again-2023

For the latest multifamily news from across the internet, visit the Gray Report website: ⁠https://www.grayreport.com/⁠

Download Gray Capital's latest report on multifamily loan maturities: ⁠https://www.graycapitalllc.com/report/⁠

Sign up for our free multifamily newsletter here: ⁠https://www.graycapitalllc.com/newsletter⁠

DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.

As the wave of apartment supply slows, there may not be much building activity to follow, based on current permits and starts data. Low interest rates and other incentives could induce builders to begin more apartment projects, but the lengthy timeframe till completion could mean that, even though we're still well within a historic wave of apartment supply, there could be an apartment shortage in the making.

For the latest multifamily news from across the internet, visit the Gray Report website: ⁠https://www.grayreport.com/⁠

Download Gray Capital's latest report on multifamily loan maturities: ⁠https://www.graycapitalllc.com/report/⁠

Sign up for our free multifamily newsletter here: ⁠https://www.graycapitalllc.com/newsletter⁠

DISCLAIMERS: This video does not constitute professional financial advice and is for educational/entertainment purposes only. This video is not an offer to invest. Any offering would be made through a private placement memorandum and would be limited to accredited investors.v