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Multifamily Demand Boosted by Single-Family Affordability Gap 

Although a recent swell in effective rents—which grew slightly faster in the first quarter than annual price increase for single-family homes — is narrowing the gap between mortgage and rent payments, that gap remains wide, says Marcus & Millichap. Coupled with higher mortgage rates and a supply-demand imbalance, the gap is reinforcing demand for multifamily. 

In that sector, rents advanced 16.8% year-over-year in Q1, compared to 15.4% for single-family home prices. Sun Belt markets are reporting the steepest rent increase relative to home price growth, says Marcus & Millichap. 

Meanwhile, though, the Federal Reserve’s announcement of an increase to the benchmark rate accelerated growth in the 30-year mortgage rate, which breached 4% for the first time since 2019. Yet Marcus & Millichap also sees the potential for relief from home price increases in recent permitting activity: Single-family permits in February rose 5.2% Y-O-Y, while project starts advanced 13.7%. 

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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