Freddie Mac Multifamily Midyear Outlook Shows Moderation on Macro Headwinds
Freddie Mac (OTCQB: FMCC) projects a moderated growth in multifamily fundamentals, with originations expected to contract to $440-450 billion in 2022, reflecting macroeconomic challenges like inflation and rising treasury rates. Despite an anticipated decrease in total volume, rent growth and occupancy rates are set to remain above long-term averages. Overall, gross income growth in multifamily markets is forecasted at around 6.8%, with vacancy rates stable at 4.8%. The Multifamily Midyear 2022 Outlook provides further insights into these trends.
- Gross income growth in multifamily markets is forecasted at around 6.8%.
- Vacancy rates are expected to remain stable at 4.8%.
- Rent growth and occupancy are projected to remain above long-term averages.
- Expected contraction in multifamily origination volume to $440-450 billion, a decline of 8-10% from 2021.
- Economic uncertainty and rising treasury rates are posing challenges to multifamily lending.
MCLEAN, Va., Aug. 02, 2022 (GLOBE NEWSWIRE) -- After six months of healthy growth in multifamily fundamentals, Freddie Mac (OTCQB: FMCC) projects the pace of growth will begin to moderate through the remainder of 2022. A contraction in multifamily origination volume to
“We believe the multifamily industry is well positioned to weather the economic uncertainty and interest rate volatility impacting the broader economy throughout the rest of the year,” said Steve Guggenmos, vice president of Multifamily Research & Modeling at Freddie Mac. “While we expect total volume projections will be down in 2022, rent growth and occupancy will still remain above their long run averages.”
The Multifamily Midyear 2022 Outlook from Freddie Mac’s Multifamily Research Center is available online here. The paper outlines several key findings:
- Growth Continues but Moderates: Multifamily growth continued to beat expectations through the first half of 2022 after coming off a record-breaking year in 2021.Freddie Mac expects gross income growth to moderate throughout the rest of the year but is on pace to outperform yearend inflation projections.
- Gross Income Gains Across the Board: Every market Freddie Mac tracks is projected to experience gross income gains. The Florida and Southwest markets are generally expected to outperform the nation, while the smaller markets in the Midwest and few gateway markets are generally expected to be among the comparatively weaker performers. Overall, gross income growth in 2022 is forecasted to be around
6.8% and vacancy rates are expected to remain flat at4.8% . - Slight Contraction in Multifamily Lending: Considering the heightened degree of economic uncertainty and volatile treasury rate environment, Freddie Mac expects originations in 2022 to experience a slight contraction to
$440 -450 billion, down 8-10% from 2021.
Multifamily’s outlook and additional related materials are available online here.
Freddie Mac Multifamily is the nation's multifamily housing finance leader. Historically, more than
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