Multifamily is facing negative headwinds this year and into the next in the form of outsized supply growth and weak demand drivers, according to PGIM Real Estate's Quarterly Insights report.
Housing rent growth is compressing across market types. Occupancies in higher supply barrier markets are holding up well, while many Sunbelt markets are showing deterioration.
Sunbelt market occupancies are now farther below pre-pandemic levels than elsewhere, and rental growth is converging across Sunbelt and non-Sunbelt markets. Rental growth in metros located across the Sunbelt has been higher than other markets since 2013. However, PGIM expects a temporary shift, with rents and occupancies softening the most in the Sunbelt.
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