Here’s our team’s predictions for 2025!

1. Multifamily Rent Growth Rebounds: After a challenging market period, multifamily rents are expected to see positive year-over-year growth.

2. Stable Interest Rates: Interest rates are projected to stabilize within the 3.75% to 4.75% range, offering a more predictable financing environment.

3. Rising Loan Losses: Real estate loan defaults and realized losses are likely to increase throughout 2024, potentially impacting lender strategies.

4. Debt Funds Dominate: Debt funds are expected to remain a key player in real estate financing, supporting deals amid tight lending conditions.

5. Homeownership vs. Renting Gap Narrows: The financial gap between owning a home and renting may decrease slightly but will remain close to current levels.

6. Moderate Sales Activity: Multifamily property sales are anticipated to rise modestly, though volumes will still be far below the highs seen in 2021-22.

7. Tariffs Affect Construction Costs: Tariffs on imported materials will likely drive up construction expenses, adding pressure to development budgets.

8. Property Insurance Adjusts: Property insurance costs should align more closely with inflation, easing some financial strain on property owners.

9. Affordability Challenges Persist: As rents continue to rise, housing affordability will become a more pressing issue for renters nationwide.

10. QOZ Legislation Extension: The Qualified Opportunity Zone (QOZ) program is expected to be extended, supporting continued investment in underserved communities.