McLean, Va.—The Freddie Mac Multifamily Research Group released its multifamily real estate market demand forecast for the next several years. The paper forecasts a base case that entails slow economic growth with an additional 1.7 million new multifamily renter households between now and 2015. In addition, the paper forecasts that the multifamily market and demand for rental housing will remain solid and healthy during the same period of time.
The forecast analyzes demographic trends, housing supply and economic data. The scenario-based approach explores rental market conditions under different economic environments: slow growth, no growth and accelerated growth.
- Recent declines in homeownership related to economic stress and high foreclosures in the single-family housing market have benefited the multifamily market.
- The homeownership rate will drop 1 to 2 percentage points if the current slow recovery continues.
- The single-family rental market, a growing and distinct market from multifamily, has expanded 16 percent (about 3 million units) since 2007.
- Multifamily market demand is expected to be strong through 2015 primarily due to demographic trends and a decreasing national homeownership rate.
- Rental demand will continue to grow faster than historical averages.
- Multifamily demand is likely to be 1.7 million new renter households between now and 2015 (slow growth prediction). If the economic recovery accelerates, demand will be in 1 million new renter range; and if no recovery, then in the 1.6 million range for new renters.
Source: Multi Housing News.