Landlord Alert: Good News Ahead!

The Landlord Friendly Era is coming sooner than you think!

Specifically for multifamily (though similar patterns exist for single-family), there were a record number of construction projects started, leading to a flood of new units hitting the market from 2022 through this year.

However, new multifamily starts have fallen off a cliff.

There are many reasons for the slowdown in new construction:

Higher mortgage rates: Increased borrowing costs

Higher construction costs: Increased operating costs

Flat rent growth: Market saturation of new units combined with slowing inflation.

Once the new inventory is absorbed by the market, there will be less competition, as existing units will be competing with significantly fewer new units.

It will take time to absorb the existing and soon-to-be-completed inventory, but likely toward the end of 2025 and into 2026, landlords will start to see better rent growth.

Because it takes 2 to 3 years to plan, start, and complete multifamily projects, landlords could enjoy several years of strong rent growth.

Bottom Line

New multifamily construction has slowed significantly and, due to market headwinds, is unlikely to rebound anytime soon.

With fewer new units hitting the market, existing landlords will likely enjoy an era of stronger rent growth.

Exit Question: What real estate opportunities do you see ahead that you're excited about? Share your thoughts.