Durable Demand Drivers Supported by For-Sale Affordability Challenges
Historically, multifamily demand has been correlated with cyclical growth in household income, which is expected to remain robust and above 4% over the next five years. Additionally, demand is increasingly anchored by structural affordability constraints in the for sale housing market. Elevated home prices, higher mortgage rates, and limited existing home inventory have materially widened the cost differential between owning and renting. This has extended renter tenure, supported renewal rates, and reduced elasticity of demand even amid slower job growth. Challenged for-sale affordability is expected to create 2.5 million1 new renter households from 2025 to 2028 as the home ownership rate declines from 65.6% to 64.7%.
Demographic trends further reinforce this dynamic. Large renter cohorts continue to move through prime renting years, while older households increasingly opt for rental housing due to mobility, lifestyle, and capital preservation considerations. The result is a demand base that is broad, sticky, and less cyclical than in past cycles.
