Apartment investors, developers bullish despite higher interest rates than expected

Multifamily developers and investors are bullish on metro Phoenix, despite interest rates staying higher than expected.

The new year promises changes, with supply growth waning and different economic policies likely to impact demand, according to a Yardi Matrix National Multifamily Report issued Jan. 13.

The multifamily sector finished 2024 on the downswing, with the average U.S. advertised rent falling $4 nationally in December to $1,742, according to the report. Year-over-year rent growth was down 10 basis points to 0.6%.

The Phoenix multifamily market is showing signs of recovery as easing inflation and rising consumer confidence have boosted renter demand, said Doug Ressler, manager of business intelligence for Yardi Matrix.

“Over the past 12 months, Phoenix recorded 20,000 units of net absorption, significantly higher than the pre-COVID annual average,” Ressler said. “Despite the increased demand, the market faces high vacancy rates. This is largely due to a surge in new construction, with 2,100 new units delivered in the past year and an additional 23,000 units under construction.”

This story is posted in partnership with Phoenix Business Journal. Click to read the full story.

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