This year, multifamily and apartment properties did very well, and a report from MPF Research, the market intelligence division of RealPage, Inc. confirms the progress. The rent growth pace for apartments in the United States increased to 4.7 percent, “a return to price inflation levels not seen since 2011,” according to Mortgage Professional America.
Rents also increased by 0.6 percent during the last quarter of the year, which MPF called an “unusually strong increase for the fourth quarter time period,” since leasing activity tend to slow toward the end of the year.
“This market cycle for the apartment industry looks like a record-setter in terms of both total revenue growth and the duration of the strong increases,” said Greg Willett, MPF Research vice president. “The pace of rent growth normally slows after the first couple of years in a cycle, once additional new supply comes to stream, but demand is rising right along with deliveries this time.
This year, 246,579 apartments were completed in the nation’s 100 largest metro areas, and demand was slightly higher at 268,532 units. Occupancy ends the year at about 95 percent, with an increase of 30 basis points.
Next year should also be a good year for rental properties, and rent is expected to increase by 3.5 to 4 percent.
“The momentum in job creation that emerged in 2014 looks sustainable in 2015, pointing to significant new household formation and sizeable apartment demand,” Willett said.
Now is an excellent time for commercial mortgage brokers to reach out to borrowers looking to finance their multifamily or apartment properties. As this market continues to grow and demand increases, these borrowers may be looking to refinance their existing properties or purchase new investments.
Are you working with a borrower who needs to refinance their rental property, but cannot obtain a bank loan? Call APEX Mortgage at 800-262-2739 or contact us online.