For more than a decade since the end of the global financial crisis, the U.S. housing market has been grappling with long-term structural undersupply, a challenge that continues to profoundly influence investment dynamics today. This persistent housing shortage has led to surging rents and home prices, creating a significant affordability gap.

The pandemic-era increase in demand further exacerbated the issue, and the subsequent run-up in construction costs and general inflation completed the dislocation trifecta. While developers responded to strong demand with new projects, these have been largely limited to fast-growing Sun Belt markets with outsized rent growth benefiting from an influx of affluent households. The record supply of multifamily units in a handful of markets and the resulting weakness in rent growth has created a wider perception of a sagging rental market.

However, this localized oversupply has now largely been absorbed according to the latest market