Concerns about interest rates and income growth as well as a flood of 500,000 new units will likely restrain multifamily transactions in the year ahead, according to a new report on the multifamily outlook from Yardi Matrix.

When interest rates briefly fell in 2024, there was an uptick in dealmaking, but it slumped as rates rose again, the report noted. The total value of transactions in 2024 was $62.7 billion, virtually the same as in 2023. And Treasury rates are not expected to fall again to a level that would spur more deals this year.

Investors remain most focused on fast-growing markets in the Sunbelt and Mountain West, especially Denver ($3.4 billion). Dallas ($3.1 billion), Phoenix ($3 billion) and Atlanta ($2.9 billion). Washington, DC, New York, Los Angeles, Boston and Chicago also saw significant activity. Mergers and acquisitions also rose as wealthy investors bought in bulk in Sunbelt markets expected to experience stronger rent growth in 2026 and beyond. Sales were highest in tech hubs.