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Multifamily Deals Face Headwinds Amid Interest Rate and Supply Concerns

But rising delinquencies will open opportunities to buy distressed assets.

By Philippa Maister | February 06, 2025 at 05:45 AM

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 deal-making, 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.

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