Demand for multifamily units settled somewhat in the third quarter as household formation normalized and inflation began to hit consumers' budgets, following an extended period in which the asset class was riding high.
A new report from Marcus & Millichap rotes that the average effective monthly rent in the U.S. rose nearly 16 percent in 2021, with some Sun Belt markets rising more than 25 percent last year alone. But about 80,000 fewer households were created in the first half of the year, cooling the market as economic headwinds picked up speed.
However, "even with a slower second half, vacancy at midyear leaves ample leeway before rates in most metros approach pre-pandemic levels," the report notes. Marcus & Millichap researchers say that overall, the outlook for the sector remains positive.
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