While it is clear that the multifamily sector has generally bounced back from the pandemic, a new report from Fitch Ratings indicates that a full recovery in urban areas to 2019 levels could take longer than prior recoveries.

Occupancies and rents are improving and concessions are easing, but urban apartments still trail those in the suburbs, according to Fitch. Usually, rents in cities rebound in a year or two, but the uneven reopenings may delay their recovery.  

The ratings agency says that key renter cohort and outmigration trends will delay a full recovery to prior cash flows for urban landlords. The population growth in the 35-55 cohort means that space will be at a premium, which favors suburban apartments. Fitch notes that these renters could also choose single-family homes for purchase and rent, though rising interest rates could hinder home purchases.