Could the multifamily market be headed towards a “period of stagflation?” That's the question Andrew Semmes, Senior Research Analyst, poses in the Matrix May 2024 Multifamily Rent Forecast update.
“While we still need to be humble about the overall economic trajectory and the path the Federal Reserve takes, we believe we are probably still on track for a rate reduction by the end of the year,” writes Semmes.
Multifamily Rent Forecast Update
As the April BLS jobs report came back lower than expected, some of the stagflation fears have been relieved. However, just like the overall split in the general economy, multifamily is a “tale of two cities.”
Markets that saw significant growth during the pandemic—and that are now experiencing a large influx of supply—are seeing stagnant or falling rents, according to Semmes. This is most apparent in Florida, Texas, and other “pandemic high-growth markets.”
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- Multifamily rent growth rate unchanged at 0.3%
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On the other hand, quite a few secondary markets are still seeing strong growth in asking rents. These markets are primarily in the Midwest, Northeast, and Southern regions, and include metros like Des Moines, Cincinnati, Northern Virginia, and Providence.
Yardi Matrix Multifamily Outlook for 2024
Yardi Matrix's overall outlook on the market remains mostly the same. Markets facing significant supply issues will continue to struggle to make gains; issues should be alleviated once new units get absorbed.
It's expected that the Fed will keep rates higher for a bit longer, so Matrix anticipates a minor downturn/recession will occur “a little later and perhaps last a little longer.”
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