Multifamily real estate is getting a lot of love from investors hedging against volatility, and from first-time and downsizing homebuyers. Experts are starting to wonder how long multifamily's reign will last.
Multifamily investment firm Monument Capital Management principal Stuart Zook sees only one potential disruptor on the horizon: homeownership becoming cheaper than renting as a result of looser lending standards and practices. “It basically goes back to, ‘how good is our memory?’ If you have [little or] no money down with rental rates rising, you can actually buy at the same price that you would to rent, would you?” Zook tells HousingWire, adding that more buying could cause a "slight ripple," in the multifamily sector.
Millennials and Gen-Zers are flocking to cities with high job growth and snapping up the units almost as fast as they go up. These two generations are large and largely cannot afford homes at this point, nor will they be able to for some time. The second demographic trend in favor of multifamily demand is Baby Boomers downsizing. The second largest living generation has strong demand for many of the same amenities that Millennials and Gen-Zers want, and are selling off their homes, and rent to allow for travel or more luxurious lifestyle in their golden years. The multifamily market is in a generational sandwich, getting major love from the whippersnappers and the fogeys.
