Freddie Mac sees limited growth opportunities in the multifamily sector for 2024, as the industry deals with high supply.

The government-sponsored enterprise is forecasting rent growth of just 2.7 percent, according to its new midyear outlook. It also projects the vacancy rate to jump six percent, equating to a rental income boost of just 2.5 percent.  For context, rental income growth is 20 basis points lower than the average on record from 2000 to 2022, according to RealPage. Freddie refers to its projections as "muted" growth.

While Freddie notes the economy is healthy overall, the high supply of new units, pegged at a 40-year-high, is not meeting the multifamily demand. A couple of other elements leading to volatility are high interest and cap rates.