Multifamily Housing Expected to Begin Recovery This Year
While the economic downturn has certainly had a negative affect on the multifamily housing market, the sector remains on solid footing according to mortgage giant Freddie Mac. Certainly, the multifamily housing sector is not where anyone would like to see it, but it’s not all doom and gloom either.
According to the Freddie Mac 2021 Outlook, the multifamily housing sector should see a rebound this year, barring any major and unexpected setbacks.
In a summary of the report, Steve Guggenmos, VP or Research and Modeling at Freddie Mac states, “The multifamily market entered the pandemic on solid footing, with 10 years of steady growth. Combined with forbearance relief and stimulus legislation, as well as historically low interest rates, some 2020 outcomes did not veer too far from previous years. These outcomes may prove helpful to the market’s recovery in 2021, though our projections are not inclusive of any future federal economic relief that may occur.”
At Miller’s Landing, we’re certainly closely following developments in the multifamily housing market. Our new multi-use development in Castle Rock, CO, will include attractive new multifamily housing options. Here are some of the findings from the report.
Vacancy Rates May Slip A Bit
Despite the pandemic, vacancy rates in the multifamily housing sector remained somewhat steady in 2020. By the end of the third quarter last year, the vacancy rate was 4.3 percent, just a bit higher than at the end of 2019. Freddie Mac predicts the vacancy rate will decline slightly this year by -0.2 percent, with gross income falling a modest -0.5 percent
Rent Growth Remains Positive
In the vast majority of markets rent growth remained positive, with 2021 growth projections looking significantly better than last year. Freddie Mac expects nearly half of all metro areas to see positive growth in rent rates, with metro areas that have been less affected by the pandemic to perform better.
Loan Originations Expected to Rebound
After starting strong, loan originations plummeted in the second quarter of 2020. However, with rent collection rates holding relatively steady and low interest rates, the second half of the year saw pronounced growth in loan originations. After a decline of 20 percent in 2020, loan origination rates are projected to recover to levels nearing those of 2019.
What Does the Future Hold?
Freddie Mac expects to see improving conditions in the multifamily housing market in 2021. Although hurdles remain, including high unemployment, the increase in vaccine availability and stimulus spending should see a rebound in the job market this year, which will lead to a greater demand for housing.
“All in all, the long-term fundamentals of multifamily housing are still on solid ground and demographics favoring rental housing point to sustained long-term demand,” Guggenmos said.
Multifamily Housing at Miller’s Landing
At Miller’s Landing, we’re moving forward with our plans to develop attractive multifamily housing options. Miller’s Landing is a new 65-acre multi-use development located in the heart of Castle Rock.
Miller’s Landing will feature a pedestrian-friendly town center with restaurants, retail and entertainment options. It will also include modern office spaces and large tracts of open space with stunning views of the Colorado Front Range. Miller’s Landing features easy access to downtown and nearby Philip S. Miller Park via walking and bicycling trails.
About Castle Rock, Colorado
Castle Rock is a popular and growing community in the south Denver metropolitan area. Located on the I-25 corridor, its combination of small-town charm, high-quality of life and easy access to Denver to the north and Colorado Springs to the south makes it a popular community with well-educated professionals.
Ranked a Best Place to Live
Castle Rock is regularly ranked as one of the best communities to live and work in the country. Beautiful sunny weather, excellent schools, outstanding outdoor recreation and small-town charm make Castle Rock one of the best places to live in the U.S.
Miller’s Landing connects the past with the present, employers to talent and everyone to more of what they love. We’re creating a path to new personal, professional and recreational opportunities every day. Miller’s Landing is an exciting place to build the future together. Join us!