There has been a recent irony in the multifamily industry. About 40% of the $1.5 trillion maturity wall properties face by the end of 2025 are multifamily. While it's impossible to tell the percentage of that segment facing trouble, about a quarter of the $1.5 trillion total will have difficulty refinancing.

The irony is that as costs of financing rise, multifamily owners tend to increase rents. Those rents are an important part of the shelter costs that have been one of the largest drivers of overall inflation. So there has been a vicious circle. Higher inflation makes the Federal Reserve keep interest rates higher, which causes financing and refinancing prices on properties to cost more, leading to property owners to push up rents.

Which makes a new economic letter out of the Federal Reserve Bank of San Francisco of particular interest. The title is When Is Shelter Services Inflation Coming Down? Authors Òscar Jordà, senior policy advisor in the bank's economic research department, and Aren Yalcin, a research associate in the department, noted that in July 2024, shelter services comprised 2.2 percentage points to a core (without energy or good) Consumer Price Index reading of 3.2% over the previous 12 months.