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Sky-High Mortgage Rates Benefitting Multifamily

Sam Tenenbaum • 9/28/2022
With mortgage rates approaching 7%, we wanted to see the material impact of the movement in the market. Using data from Cushman & Wakefield Asset Services, which looks at the self-identified reasons that renters are moving out, we’ve laid out the share of renters that have said they were moving out of our managed communities to buy a home, condo, or townhouse.

As would be expected based on rising prices and rates, we’ve seen a steady decline in renters moving out to buy a home.

  • In June of 2021, 17.6% of renters who left our communities did so to purchase a home, but as of the latest data in September, the share of residents leaving for home buying has fallen below 11%.  
  • Right now, the biggest obstacle for homebuyers is sky-high mortgage rates. Today’s 30-year fixed rate is approaching 7% on average according to Freddie Mac, which is where mortgage rates were during the Great Financial Crisis.  
  • In response, we’ve seen a number of reports of the single-family market cooling. The Case-Shiller Index showed a slowdown in the recent release from July, with growth falling from 18.1% YoY to 15.8% YoY, which was the steepest decline in the index’s history.  

What does these numbers mean for Multifamily?  

  • As fewer residents leave communities to purchase homes, these renters will likely remain renters for longer, leaving apartment demand relatively durable in the face of economic uncertainty.  
  • But with home prices cooling in response to rising rates, we could see homebuyers return, especially if the labor market remains relatively durable in the face of a mild recession.  
  • This is one of the major factors that is cited in support of the single-family for rent space – millennials are at a point in which they would like more space, but might have trouble affording a mortgage payment given the still-high prices and high rates.  




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sam tenenbaum
Sam Tenenbaum is Cushman & Wakefield’s Head of Multifamily Insights. In this series, he shares unique perspectives on today’s multifamily market, gathered from Cushman & Wakefield’s unique data on the lending environment, strong capital markets presence and the 175,000 units that we manage across the U.S. 

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