Multifamily Rebounds in 2025: What You Need to Know

Multifamily Rebounds in 2025: What You Need to Know

Investor sentiment toward the multifamily sector has made a full comeback. According to Altus Group’s Q1 2025 U.S. Investment & Transactions Report, 62% of investors now consider multifamily a top-performing asset class, up from 46% a year ago. Only 6% now see it as a likely worst performer—down dramatically from nearly a third in early 2024.

Why the Shift?

Altus Group, a global leader in commercial real estate analytics and intelligence, highlights three major drivers:

• Locked-in mortgage rates & low home inventory are keeping potential homebuyers in the rental market, strengthening occupancy and stabilizing rents.
• New multifamily supply is slowing, helping rebalance the market and ease rent pressure.
• Strong economic fundamentals—steady employment and resilient consumer spending—continue to support demand.

Key Multifamily Stats from Q1 2025:

• 📈 Transaction volume rose 3.2% YoY to $18.4B
• 🏢 Price per square foot up 3.9% YoY
• 🏠 One of only two CRE sectors to post YoY transaction growth

Despite broader CRE headwinds, multifamily stands out for its pricing resilience and income stability.

What This Means for You

If you’ve been waiting on the sidelines, now’s a smart time to reassess. As Altus notes, “fundamentals continue to favor multifamily,” and investor sentiment is signaling renewed opportunity.

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Frequently Asked Questions (FAQs)

1. Is multifamily real estate recovering in 2025?

Yes. Investor sentiment has rebounded significantly, with 62% now viewing multifamily as a top-performing asset—up from 46% in 2024 .

2. What’s driving renewed confidence in multifamily investments?

Key drivers include low home inventory, stable occupancy rates, slowing new construction, and steady employment, all of which support rental demand .

3. How is multifamily performance compared to other CRE sectors?

Multifamily is one of only two commercial real estate sectors showing year-over-year transaction growth, highlighting its resilience .

4. Are transaction volumes increasing in 2025?

Yes. Multifamily transaction volume rose 3.2% year-over-year to $18.4 billion, with price per square foot also increasing by 3.9% .

5. Is now a good time to re-enter or expand in the multifamily market?

Absolutely. Fundamentals are strong, pricing remains attractive, and fewer new builds mean less future competition for existing properties .

6. What should investors focus on in 2025?

Investors should target well-located, income-generating assets with high occupancy and explore value-add opportunities to maximize returns .