The multifamily market is expected to continue its upward rise over the next year as strong demand, limited construction, and rising rents make the asset class an inflationary hedge.

A new report from Walker & Dunlop says low interest rates should continue to support CRE buyers, owners, and tenants, noting that yields remain "highly attractive" as compared to both the public equity and debt markets.  And that's particularly true for multifamily, where net absorption ended the year up 6.8% from 2019. In the first half of this year, net absorption reached record levels, double that of 2020 levels. Vacancy levels slipped by 80 basis points in Q2 to 5.7% and sent rents up by 6.3% over the quarter and by 9.4% YTD.

While the sector has been somewhat plagued by ongoing eviction moratoria, there's good news: 95.6% of rents were paid as of June 2021, down just slightly from the past two years' figures. And "the forward goal is that employment gains will offset a reduction in federal and state subsidies to households that were enacted to support households through the pandemic," the report notes.