April 27, 2012
Courtesy of BuilderOnline.com
Fitch: Multifamily Prices, Occupancies Reaching Peaks
While occupancy and rents suggest multifamily may be nearing pre-recession peaks, the downside risk is not the same. There are several longer term factors that are positive signs for multifamily. According to the U.S. Census, the renter population (the number of individuals in the 20-34 year old age range) is likely to grow from nearly 66 million this year to almost 70 million in 2025. And despite the recovery, the number of multifamily buildings under construction still lags this growth. Additionally, Fitch still sees substantial equity in recent acquisition financing.
Over the coming months, we plan to expand our analysis by looking more closely at trends in multifamily net operating income and cash flows in addition to rents and vacancy. We will report on this data when it provides a clearer view.
Additional information is available on www.fitchratings.com.