Multifamily Real Estate Dynamics 2024

Multifamily Real Estate Dynamics 2024

Each year, renowned economic research entities release their forecasts for the coming year. In 2023, the U.S. economy largely defied recession fears, contributing to a softer economic landing. The market exhibited a more subdued performance than initially projected, resulting in a more optimistic outlook for 2024. 

As January ends, economic experts and government agencies have published their 2024 outlook reports. We’ve identified key indicators from these reports that will influence the overall performance of the Multifamily market in 2024. This article will dissect various economic indicators and provide insights on how they might impact your investment strategy for the year.

Interest Rates

2023, demonstrated true resilience in a historically inflationary period. The FED increased interest rates 11 times, halting many lending transactions as it became more difficult for operators to pencil deals with these high rates. At last, the Federal Reserve has announced its expectation for modest decreases in interest rates over the upcoming year. Experts expect this decline will stabilize the market, resulting in an anticipated rise in Multifamily transactions. According to Goldman Sachs, “We should see the final decent of inflation this year”, already seeing rebalancing in the auto, housing rental, and labor markets. 

This is wonderful news for owners and investors who sat on the sidelines last year waiting for rates to stabilize before acquiring properties. Despite this promising development, we advise investors to exercise caution and remain diligent in their due diligence. 

For example, in 2023, Viking Capital conducted a thorough analysis of more than 593 deals to identify the most promising investment opportunities for our investors. This comprehensive process led to the successful placement of 82 deals under contract, ultimately culminating in the selection of three investments that promise to deliver the highest returns for each of our investors. Our cautious underwriting strategy meticulously identifies and mitigates potential risks, serving as a protective barrier against unfavorable market conditions and bolstering the overall stability of our portfolio. 


Over $100 Billion in Multifamily loans will be maturing over the next 24 months. According to a recent article by Forbes, there is nearly $2.7 trillion in CRE debt maturing by 2027. Of this amount, roughly $1 trillion is associated with multifamily properties. For context, $75 billion matured in 2021, the highest amount ever recorded, yet each year through 2027 is looking to surpass this record.” 

The impact of these loan maturities is going to be problematic for many operators who purchased their property using floating debt. In the past 18 months, interest rates have surged to unprecedented levels, placing many of these properties in a precarious position where their cash flow may not be sufficient to absorb the increased monthly interest payments.  Should the chosen remedy be to refinance, additional capital will be required to meet the demands of the new loan terms. For operators constrained by limited capital, selling their property may be their only option. For investors, this will create an opportunity for value-driven deal flow. 

Rent Growth & Occupancy Rates

Many experts agree, that rent growth in 2024 will be moderate. Fannie Mae projected rent growth in most markets to linger between 1% and 2% in 2024, while Freddie Mac Multifamily forecasts a national rent growth of 2.5% and an occupancy rate of 94.3%. These reports anticipate regional strength in the Midwest and Northeast in the initial half of the year, as they rebound from a modest rent growth performance since 2021. 

Per the CBRE U.S. Real Estate Market Outlook 2024, “Although many markets in the Mountain and Sun Belt regions are expected to continue having negative rent growth through mid-2024, this should bolster rental demand by attracting in-migration. Many markets struggling with imbalanced supply and demand are expected to outperform long term. Local and regional economic drivers will continue to favor large secondary markets across the Sun Belt and most large coastal markets.” 

These reports bolster the strength of Multifamily as an asset class in 2024, with an even more favorable outlook for 2025 into 2026. 

Apartment Oversupply

In 2024, there is anticipated to be the largest increase in apartment supply since 1987, with 440,000 new units expected and over 900,000 units currently under construction. This substantial increase in supply is a key factor contributing to the slowdown in rent growth and a decline in occupancy. That being said, CBRE believes; “Developers have correctly anticipated where demand will best support new supply based on job growth figures. Markets with the largest supply pipelines (e.g., Austin, Dallas, Nashville, and Atlanta) have the highest job growth projections.”  The Forbes Business Council agrees. Consistent growth in these markets will bring in migration making the onslaught of new developments imperative to sustain the growth. 

With the influx of new developments expected to be delivered this year, Fannie Mae forecasts an 18.3% decline in the initiation of new developments in 2024 compared to 2023.

Labor Market

The prevailing opinion suggests that job availability remains robust, and individuals seeking employment can find opportunities.  The unemployment rate remains low at 3.7%, suggesting a strong and stable job market. 

Compensation may not be as robust as in recent years, especially for skilled labor. The scarcity of skilled labor can be ascribed to various factors, including the early retirement of individuals aged 55 and over during the pandemic. Nick Bunker, economic research director for North America at the Indeed Hiring Lab, said there’s a case for optimism for 2024, but it’s best not to oversell it. “The labor market in 2023 didn’t follow the script many people wrote for it,” he said. “Despite many projections for a recession, a historically fast tightening of monetary policy by the Federal Reserve, a banking crisis, and geopolitical crises and uncertainty, the labor market stands strong.”

Overall, many anticipate that employment concerns in 2024 will be transient challenges, with a stable labor market expected in the years to come.


There is cautious optimism for the outlook of 2024. Economic researchers agree that due to the resilience the U.S. economy demonstrated in 2023, there is cause for this sentiment. They remain cautious in their predictions as they watch and wait for interest rate stabilization and inflation to subdue. 

Investors should not rely solely on these reports as they are ever-evolving. However, utilizing this information to help understand your long-term investment strategy; specifically regional market dynamics can prove beneficial.