Demand, positive demographic drivers and job growth point to a healthy state of affairs for the U.S. multifamily market, according to a new market analysis compiled by Yardi Matrix reports.
“We expect U.S. rent growth will remain moderate overall, led by growing Southern and Western metros in which supply growth has not gotten too far ahead of demand,” states the report.
Supply deliveries nationwide are beginning to plateau after topping 300,000 in 2016 and 2017. Development has been slowed by construction delays due to worker shortages and rising materials costs. In addition, the report notes, “tax cuts will increase income, despite stagnant wage growth,” and the Consumer Confidence Index reached an 18-year high in February. The economy has added more than 200,000 jobs per month in 2018.
The market analysis notes rising interest rates and mildly disappointing first-quarter GDP growth prompt concerns “the economic cycle is running on fumes,” while recent tariffs and rising oil prices add further uncertainty. However, it continues, “underlying U.S. economic fundamentals remain steady,” giving rise to a 2.9 percent rent growth forecast for 2018, slightly above initial forecasts for the year.
The full report can be downloaded here.
Yardi Matrix offers the industry’s market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. The firm covers multifamily, industrial, office and self-storage property types.