Marcus & Millichap

2019 Multifamily Investment Forecast

National Report, 2019

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National Multifamily Index (NMI)

  • Minneapolis-St. Paul climbed two spots to head this year’s Index. It is the only Midwest market to break into the top 20. San Diego also inched
    up two notches on solid rent growth to claim second place.
  • Neighboring Florida metros Orlando (#6) and Tampa-St. Petersburg (#12) registered the largest advances in this year’s NMI, leaping 11 and
    nine places, respectively.

National Economy

  • Accelerated job creation in 2018 drove the unemployment rate of young adults between 20 to 34 years old to a 48-year low of 4.5 percent. With
    two-thirds of this age group living in rentals, they are a dominant force supporting apartment demand, and the strong job market has empow-
    ered more of them to move out on their own.
  • The monthly payment on a median-priced home increased by $175 last year to nearly $1,700 per month, dramatically widening the disparity
    between a mortgage payment and the average monthly rent. This widening payment gap, together with tighter underwriting, has restrained
    young adults’ migration into homeownership, reducing the under-age 35 homeownership rate to 37 percent, down from the peak of 43 percent
    in 2007. This confluence of factors will likely carry into 2019, sustaining young adults’ preference for rental housing.
  • Though consumption and corporate investment will support economic growth in 2019, trade imbalances and a likely weaker housing market will
    weigh on momentum. Job creation, facing an ultra-tight labor market, will dip to the 2 million range, but wage growth should push above 3 percent.

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