In its Midpoint 2025 report, Cushman & Wakefield notes that the multifamily sector continues to benefit from strong structural tailwinds, particularly due to shifting demographics and macroeconomic conditions. Robust household formation, driven largely by a growing foreign-born labor force, has maintained a healthy renter pool, even as overall domestic population growth and immigration are forecasted to slow.
Demand remains strong: high mortgage rates and limited single-family home inventory make renting a more attractive and affordable option, especially for younger adults who have relatively lower levels of wealth. This dynamic supports ongoing rental demand, with millennials, for example, who hold only 6% of the nation’s net worth.
Urban cores are experiencing a resurgence as population growth in these areas surpasses pre-pandemic norms, signaling renewed interest in city living. At the same time, Sunbelt markets remain attractive due to favorable demographics and significantly reduced construction activity, which has declined most notably in the South. With construction starts nearly halved, markets such as Austin, Jacksonville, and Dallas are poised for stronger rental growth. Renters are gravitating toward higher-quality units, with Class A buildings accounting for the vast majority of absorption—a trend intensified by subdued growth in mid- and lower-tier segments.
Overall, multifamily fundamentals remain strong despite signals of moderation ahead. The multifamily sector absorbed 102,000 units in Q1 2025 alone, sustaining momentum from 2024. While a slowdown in job and household formation is anticipated, demand is expected to remain in line with the pre-pandemic average through 2027. Concurrently, new construction is set to decline significantly, reducing supply-side pressures. The long-term resilience of multifamily demand—even through recessions—underscores the segment’s enduring appeal as a reliable investment and housing solution.
Get access to Cushman & Wakefield’s Midpoint 2025 report here.
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