2025 Multifamily Outlook: Why It’s a Vintage Year

The multifamily sector is entering one of the most compelling acquisition windows in over a decade. The 2025 multifamily outlook from CBRE and Freddie Mac points to a rare alignment of falling supply, stable fundamentals, and widening yield spreads — conditions that historically define a “vintage year” for disciplined investors.

1. Supply Has Peaked — And the Backlog Is Shrinking for the 2025 Multifamily Outlook

According to CBRE’s U.S. Real Estate Market Outlook 2025, national multifamily vacancy is projected to stabilize near 4.9%, with new starts expected to fall 74% below the 2021 peak and roughly 30% below pre-pandemic levels.

Freddie Mac’s 2025 Multifamily Outlook echoes that net deliveries are expected to decline by more than 40% YoY. Similar supply contractions in prior cycles preceded strong rent and occupancy recoveries.

2. Transaction Volume Rebounding at Lower Bases

MMCG Invest reports national multifamily transaction volume rose 18% in 2024 to roughly $102 billion, while Q1 2025 posted a 33% YoY increase.

Freddie Mac forecasts total multifamily loan originations between $370–380 billion in 2025, signaling liquidity normalization.

Cap rates remain 5.5–5.8%, roughly 120 bps above the 10-year Treasury, offering a historically favorable entry spread.

3. Fundamentals Remain Intact

Despite muted rent growth (+0.3% YoY per RealPage Analytics), long-term drivers remain strong:

• Migration to the Southeast, Texas, and Mountain West.

• Affordability gap — homeownership costs ≈ 2–3× rents (CBRE).

• Demographics — Millennials & Gen Z driving demand; immigration sustaining workforce housing.

• Supply moderation — Cushman & Wakefield Q3 2025 MarketBeat shows deliveries ↓ 27% YoY, rent growth resuming in key metros.

4. The Vintage Year Thesis

A “vintage year” occurs when pricing and fundamentals disconnect. The 2025 multifamily outlook meets every criterion:

• Pricing: 15–25% below 2022 levels

• Supply: Down > 40% YoY

• Demand: Household formation + migration tailwinds

• Debt: Stabilizing yet selective

Periods like 2009–2011 and 2020–2021 proved that deploying capital during dislocation captures outsized returns once fundamentals normalize.

Key Takeaways

• Disciplined acquisitions now position investors ahead of recovery.

• Market selection — target metros with peaked supply & strong employment.

• Debt strategy — lock favorable terms before spread compression.

• The next cycle rewards execution and operational alpha, not leverage.

Data & Visual Credits

CBRE | Freddie Mac | RealPage Analytics | Cushman & Wakefield | Yardi Matrix | Arbor Realty | MMCG Invest | CONTI Capital