This year's Research Forum, presented by the National Multifamily Housing Council, brought together leading industry researchers, analysts, portfolio managers, and consultants who are fluent in data pertaining to the Multifamily housing market. The discussion was focused on demographics, economic outlook, affordability, and social trends that will affect the multifamily housing market in the near and long term.
Joe Sinnett, AIA, Principal and Team Leader, and Dan Causier, Assoc. AIA, Designer, attended the Council’s annual research meeting in Denver and gathered key takeaways on the multifamily market in 2022.
Rent growth was strong in 2021 and the outlook is positive for 2022.
While the country is still battling supply chain challenges, rising construction costs and rising home prices, the demand for housing remains strong. Below are areas that are helping drive increasing demand for housing:
- There is an undersupply of for sale and for rent properties in the housing market.
- Demographic shifts across the country are driving demand in new locations.
- Rising home prices will continue to drive demand for rent as affordability of homes is reduced.
- A new group of renters has emerged called, “Renters by Choice.”
The undersupplied housing market for both for sale and for rent housing dates to the 2008 recession and the housing market shifting from oversupplied by 1.9M homes to now being an undersupplied market by approximately 1.8M homes. This is due to the number of new housing construction starts being below the estimated annual demand of the market of approximately 1.5M per year.
Further impacting regional markets was the pandemic and the net migration out of the large metro areas to smaller cities that provide a lower cost of living and better quality of life. This has created high demand in these new markets and these markets have seen the highest rise in home values, rent and the lowest vacancy rates. Rising home prices will provide opportunity for multifamily products to help fill the housing needs in these communities and provide an option that will provide housing options that are more in line with the percentage of income compared to the rising home prices.
Rent By Choice.
This new group of renters currently has the largest impact on how we, at Kahler Slater, design rental properties. The growing category of “Rent by Choice” renters are looking for more options in the rental housing market. They have created a higher demand for single family rentals and townhomes, and the design has evolved to include increased square footage, additional in-unit amenities, access to the outdoors and leisure activities, work from home space within the unit, and increased technology benefits. This rental group provides an opportunity to re-think typical multifamily design and provide a greater choice in housing options within a development. By providing innovative options for privacy, space and access to natural light and air, a more dynamic neighborhood is created, resulting in a shift away from monotony of traditional development. Embracing elements of single-family design with an emphasis on hospitality amenities and improved technology, results in the more resort style living that renters are looking for.