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Market Insights
February 6, 2023
8 min read
Multifamily Market Report: Q1 2023
Inflation is up. Interest rates are rising. The stock market is down. Since...
Demand in our target markets is fueled by a continuing gap in the supply of multifamily rental housing.
Based on research conducted by Hoyt Advisory Services and Eigen10 Advisors, LLC, commissioned by NMHC and NAA, the data includes an estimate of the future demand for apartments in the United States.
U.S. Needs 4.3M More Apartments by 2035 to Address Demand, Deficit, and Affordability
Key findings:
- Shortage of 600,000 apartment homes. The 4.3 million apartment homes needed includs an existing 600,000 apartment home deficit because of underbuilding due in large part to the 2008 financial crisis.
- Loss of affordable units. The number of affordable units (those with rents less than $1,000 per month) declined by 4.7 million from 2015 to 2020.
- Homeownership. Apartment demand also factors in a projected 3.8% increase in the homeownership rate.
- Immigration. Immigration is a significant driver of apartment demand, and levels tapered before the pandemic and have remained low. A reversal of this trend would significantly increase apartment demand.
- Texas, Florida, and California. The three states account for 40% of future demand and will require 1.5 million new apartments by 2035.
“The U.S. has undergone tremendously difficult conditionsthat have fundamentally altered our nation’s demographics, but one thingremains certain—there is a need and demand for more rental housing,” said NAAPresident and CEO Bob Pinnegar. “Put simply, we do not have enough housing. TheU.S. must build 3.7 million new apartments just to meet future demand, on topof a 600,000-unit deficit and loss of 4.7 million affordable apartment homes.It is time to reverse course after decades of underbuilding, and instead pursueresponsible and sustainable policies that will not only meet this demand butaddress the missing middle and loss of affordable housing stock.”
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