The Resilience of Multifamily Will Be Tested by the Short-Term Shock of COVID-19; Robust Underlying Dynamics Underpin an Optimistic Long-Term Perspective
Well-established multifamily fundamentals support a rebound on the horizon. The underlying dynamics of the apartment industry remain sound despite short-term challenges. One of the key drivers behind rental housing, the age 20-34 cohort, which makes up roughly one-fifth of the population, will continue to have a high propensity to rent. The affordability gap between renting and owning remains substantial, exacerbated by the situation at hand, making renting a more viable option for many. It was anticipated that in the coming years a wave of young adults would be ready to transition toward homeownership. However, a softened economy and unsettled housing market may delay these plans, keeping the cohort renting for longer. Looking beyond the clouds of uncertainty, these robust underlying demand drivers will support the multifamily sector through headwinds, and the disruption will likely play out as a correction rather than a fundamental downshift.