The National Association of Home Builders and Fannie Mae both forecast a strong market for multifamily housing in 2013. That’s not surprising, considering that 2012 was a “banner year” (in the words of NAHB chief economist David Crowe).
“The trend of positive rent growth and low vacancy levels seen last year is expected to continue throughout 2013,” reported Fannie Mae. Vacancy rates were at about 5.5 percent — the lowest they’ve been since at least 2005, while rents were rising — about 3.25 percent in 2012.
And going forward? Fannie Mae sees rising property values driving new construction, which it sees as raising the possibility for an over-supply in the next couple of years — at least “in a limited number of localized areas.”
In general, though, expect rents to rise 2.0 to 2.5 percent this year, while vacancies increase slightly as more construction is completed.