The multifamily real estate sector presents a particularly interesting opportunity for investors in today’s uncertain economic climate. Current market conditions — characterized by housing shortages, high mortgage rates and market volatility — create an environment for savvy buyers to capitalize on long-term growth, for three key reasons that can potentially generate strong risk-adjusted returns.

THE DEMAND

Across America, the housing shortage remains a persistent issue. According to the National Multifamily Housing Council, the nation still needs an additional 4.3 million housing units by 2035 to meet current demand. This shortfall in housing production was initially triggered by the global financial crisis and amplified throughout the 2010s by rising land and construction costs.

High mortgage rates over the past 24 months have created an additional headwind for potential homebuyers. The average 30-year fixed mortgage rate exceeds 7 perce