2d • State of Multifamily
🚨 Multifamily Market Update — December 2025
📉 Rents & Vacancy
- National rents continue to soften — 4th straight month of declines, now averaging $1,740.
- Vacancy rates are hitting record highs across many metros due to heavy new supply.
- Early 2025 showed a brief rent uptick, but momentum faded quickly.
Sources:
- Rent declines & vacancy spike:https://www.credaily.com/briefs/multifamily-rents-slide-as-demand-lags-supply-in-key-us-markets/?utm_source=chatgpt.com
- Rent growth snapshot:https://www.multihousingnews.com/rent-growth-20/?utm_source=chatgpt.com
- Vacancy hitting record highs:https://www.credaily.com/briefs/rent-decline-deepens-as-vacancy-rates-hit-record-high/?utm_source=chatgpt.com
🏗 Development Trends
- Construction starts are down ~74% from 2021 peaks, signaling a major slowdown.
- Developers shifting toward middle-income and affordable housing as luxury oversupply weighs on absorption.
- Colorado issues its first Middle-Income Housing Tax Credit (MIHTC) — a sign of national policy direction.
Sources:
- Development slowdown (CBRE 2025 Outlook):https://www.cbre.com/insights/books/us-real-estate-market-outlook-2025/multifamily?utm_source=chatgpt.com
- Supply snapshot (Arbor):https://arbor.com/blog/u-s-multifamily-market-snapshot-november-2025/?utm_source=chatgpt.com
- MIHTC announcement:https://yieldpro.com/2025/12/mihtc/?utm_source=chatgpt.com
🏢 Investor Behavior
- Investors are cautiously coming back as values begin to stabilize.
- Sales volume fell 28% YoY, showing many are still hesitant to transact.
- Sellers continue to chase 2021-style peak pricing despite softer fundamentals.
- Toll Brothers is exiting multifamily, selling its portfolio to Kennedy Wilson for $347M.
Sources:
- Investors returning:https://www.multihousingnews.com/multifamily-investors-returning-as-values-stabilize/?utm_source=chatgpt.com
- Sales volume down:https://www.multifamilydive.com/news/msci-multifamily-price-apartment-sales/806686/?utm_source=chatgpt.com
- Sellers holding pricing:https://rebusinessonline.com/multifamily-sellers-continue-to-hold-out-for-peak-pricing-says-interface-panel/?utm_source=chatgpt.com
- Toll Brothers exiting multifamily:https://www.barrons.com/articles/home-builder-toll-brothers-stock-multifamily-51e75d47?utm_source=chatgpt.com
🔮 2026 Outlook
- Multifamily expected to remain resilient long-term due to weak homeownership affordability.
- Short-term: expect soft rents, high vacancy, and economic uncertainty to continue into early 2026.
- Long-term: as supply burns off, fundamentals should tighten, supporting improved rent growth.
Sources:
- Marcus & Millichap 2026 resilience outlook:https://www.marcusmillichap.com/research/research-brief/2025/12/research-brief-december-multifamily-properties-well-positioned-to-weather-economic-uncertainty?utm_source=chatgpt.com
- 2026 headwinds forecast:https://www.credaily.com/briefs/multifamily-outlook-2026-faces-economic-headwinds/?utm_source=chatgpt.com
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🚨 Multifamily Market Update — December 2025
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All things Multifamily, otherwise known as Apartment Buildings: investing, managing, owning, financing, raising capital, partnerships, legal, debt.
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