SVN® Internation Corp. Economic Update – Keeping our clients up-to-date about the latest trends affecting the real estate landscape.
In the anticipated 2024 outlook for the US multifamily sector, Yardi Matrix forecasts a mixed landscape. Despite apartments showing resilience during the Federal Reserve’s tightening cycle, challenges are expected due to an influx of supply, rising costs, and persistently high mortgage rates. Economic growth may slow, prompting a potential market reset with increased financing costs, lower leverage, and diminished property values.
A surge in consumer confidence, as reported by Real Page, is also positively influencing apartment demand. The University of Michigan’s Consumer Sentiment Index rebounded after hitting a 30-year low in 2022, contributing to increased demand for apartments. The relationship between consumer sentiment and apartment demand indicates that during uncertain times, renters may opt to stay in Class B properties longer. However, as uncertainty fades, pent-up demand begins to materialize.
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