In our research, we find that performance in the multifamily market remained healthy during 2018, despite high levels of new supply entering the market. We expect this trend to continue into 2019, but with more modest growth in comparison to recent year.

Strong Fundamentals Continue

The multifamily market is expected to finish 2018 with solid rent growth and only modest increases in vacancy rates despite an elevated level of new supply. Some weakness in individual markets and submarkets is evident, but the overall multifamily market remains healthy.

Supply and Demand

New supply will remain elevated through 2019 and into 2020 but rents and vacancies will continue outperforming historical averages due to robust demand related to the rising cost of homeownership, changing demographics and consumer preferences.

Cap and Treasury Rates

Cap rates have fallen slightly over the past few quarters despite rising interest rates, and spreads remain near the long-run average. We anticipate cap rates may rise in 2019 if Treasury rates increase.


Multifamily origination volume is projected to grow to $317 billion in 2019 driven by solid market fundamentals and strong investor demand for multifamily properties. The 2019 figure will exceed the $305 billion in originations estimated for 2018 by 3.9 percent.

What Can We Expect in 2019?

We expect 2019 to be another strong year for the multifamily industry. Homeownership affordability constraints and consumer trends will continue to drive demand, while strong rent growth will support property price growth. For more information and analysis, please read our full report.