MCLEAN, Virginia, January 25, 2021 (GLOBE NEWSWIRE) – Freddie Mac (OTCQB: FMCC) predicts that overall multi-family origin volume will pick up in 2021, growing to $ 340 billion by the end of the year, as the economy is stimulated by another federal stimulus package. The recovery is supported in part by growth in smaller metropolitan markets, such as Phoenix and Tampa, with larger cities expected to recover more gradually. The overall market is underpinned by sustained demand for multi-family properties as investors have a long-term view of rents and vacancies, which while temporarily impacted by the pandemic are expected to bounce back in a move towards re-establishing trends over the past decade, according to the report. .
“We believe the market is set for a solid year in 2021 after facing many challenges in 2020 caused by the COVID-19 pandemic,” said Steve Guggenmos, Freddie Mac’s vice president for research and multi-family modeling. “The impact of the pandemic is most severe in larger gateway markets, such as New York and San Francisco, but many smaller cities and secondary markets have continued to experience rental growth through 2020 and will perform well over the next year. Multifamily entered the pandemic on a very solid basis, so although the impact of the crisis was felt, the sector as a whole performed well under the circumstances. “
The Multifamily 2021 Outlook from Freddie Mac’s Multifamily Research Center is available online Here. The document outlines several key findings:
- Market Expected to Rebound in 2021: The multi-family market and major economy have been heavily impacted by COVID-19, however, improving conditions and the passage of another stimulus are expected to boost the economy in 2021.
- Year-on-year rental growth will remain positive in most markets: Multi-family housing is expected to match 2019 levels despite slow spring and summer. Nearly half of all subways are expected to have positive rent growth in 2021, however large markets like New York, San Francisco, the District of Columbia and Miami will continue to see falling rents. The net effect is expected to be an increase in vacancy rates to 5.8% and an overall estimated decrease in gross income of -0.5%.
- Investor demand is strong despite the decline in originations: investment activity rebounded significantly in the second half of 2020 after a sharp decline in the first six months. Maximum rates have remained stable and property prices continue to rise, indicating strong investor demand. Total multi-family origin is expected to decline by about 20% from 2019 to $ 287 billion in 2020, but is expected to rebound to $ 340 billion in 2021.
Freddie Mac Multifamily is the nation’s multi-family real estate finance leader. Historically, over 90% of the eligible rental units we finance are accessible to low to moderate income families earning up to 120% of the area median income. Freddie Mac securitises about 90% of the multi-family loans he buys, thus transferring most of the credit risk expected by taxpayers to private investors.
Freddie Mac makes housing possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we have made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing financing system for homebuyers, renters, lenders and taxpayers. Learn more about FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.
MEDIA CONTACT: Mike Morosi (703) 918-5851Michael_Morosi@FreddieMac.com
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