The gap between homeownership and rental costs has continued to widen during the second quarter, according to Newmark's most recent multifamily capital markets report. The gap increased 26.7% year-over-year to $1,114.

Meanwhile, MBA's Mortgage Application Index, a housing and mortgage market indicator, has decreased 48.4% since March 2022 when the Fed initially increased rates. Applications are at the second lowest level in nearly a quarter century as the 30-year fixed mortgage rate hit 6.86% during the quarter. Borrowing costs for homebuyers are 43% above the five-year average, said Newmark.

Benefiting from decreased home affordability, multifamily demand increased 102% during the second quarter to 161,707 units, according to the report. Rolling four-quarter demand accelerated to 389,629 units, which has improved for five consecutive quarters, said Newmark. Demand was particularly strong in the Sun Belt – particularly Austin, Raleigh/Durham, and Nashville – where demand was 64.4% greater on average than the long-term average from 2014 to 2023. ​