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Looming multifamily oversupply likely will be short-lived
CBRE forecasts that delivery of a near-record 716,000 new multifamily housing units over the next two years will push the sector’s overall vacancy rate above equilibrium from 4.6 percent to a peak of 5.2 percent by year-end.
This may come as a surprise to some, since the United States currently has an overall housing shortage — nearly all of which is in single-family homes and not multifamily units. CBRE expects that demand for rental housing will gain momentum this year as vacancy peaks only slightly above its long-run average of 5 percent.
More than 750,000 multifamily units are currently under construction — the highest amount since the housing boom of the 1980s. Most of these new units are in markets that experienced the greatest in-migration during the COVID-19 pandemic. Alth