Multi-family properties continue to see strong income gains, despite increased development taking place. More importantly, the rent growth of the multi-family sector is outpacing inflation by a significant amount. According to CoStar, rent grew by 3.9% from last year, which is a substantial amount higher than the 0.8% increase in inflation. The growth continues in a year when vacancy commensurately grew with the construction to 8.2% from 5.8%.
Demand continues to be favorable for developers due to the demographics of multi-family properties. Many believe apartments have an appealing investment horizon, considering it will take renters some time to financially afford a home. One reason for this outlook is the part-time employment rate is historically high.