Freddie Mac Predicts 8 Percent Increase for 2019 Multifamily Loan Origination Volume
MCLEAN, VA. — In its 2019 Midyear Outlook, Freddie Mac projects the multifamily rental market to have strong volume growth in the second half of 2019. Combined with a strong labor market and low interest rate, the McLean-based agency believes loan originations will reach $336 billion for the year, which would be an 8 percent increase from the prior year’s total.
“A strong labor market and a persistent housing shortage have continued to fuel a robust rental market,” said Steve Guggenmos, who leads Freddie Mac’s multifamily research and modeling team.
According to the report, vacancy rates are expected to inch upward as new supply comes on line. The U.S. Census Bureau reports five-plus unit multifamily completions are on pace in 2019 to exceed the previous few years. Freddie Mac’s updated forecast calls for multifamily developers to add up to 365,000 units in 2019, compared with the 345,000 units completed in each of the prior two years. RealPage reports multifamily absorption has averaged about 290,000 units per year over the past three years. Rent growth is also expected to grow approximately 4 percent for the year.