Between 2020 and 2022, monthly asking rents rose by 15%, marking one of the fastest rent increases in nearly a century. Combined with rising home prices, tightening credit, and higher interest rates, some observers are drawing comparisons between today’s market and the Great Recession of 2008–2009. However, these comparisons don’t reflect the reality of today’s multifamily housing sector.
At Countrywide, we continuously monitor economic indicators and market dynamics, and the evidence clearly shows that the multifamily market is far stronger today than it was 15 years ago. Below, we explore four key factors that set today’s market apart.
1. Lower Vacancy Rates
In 2009, the national multifamily vacancy rate peaked at 13.1%, according to the National Apartment Association. By contrast, the U.S. Census Bureau reported a 6.3% national rental vacancy rate in the second quarter of 2023—less than half the peak rate during the Great Recession.
This dramatic difference reflects the stronger demand for both new and existing rental housing stock today. With absorption rates outpacing new supply, multifamily housing remains in high demand, ensuring stable occupancy levels for property owners and investors.
2. Stronger Rent Rates
The multifamily sector has seen consistent rent growth since 2021, even as growth has normalized to sustainable levels.
- In 2021, average rents grew at an unsustainable pace of 10.1% year-over-year, with some markets exceeding 20% increases.
- By August 2023, rent growth had moderated to 0.28% year-over-year, a healthy and stable pace.
This stands in sharp contrast to the Great Recession, when rent growth declined by 3.19% from 2007 to 2009 as vacancy rates soared and household incomes fell. Today’s rent stability, coupled with low vacancy rates, underscores strong fundamentals for multifamily housing.
3. Income Growth
During the Great Recession, wages declined faster than rents, reducing housing affordability for millions of Americans. Between 2007 and 2009, real median weekly earnings fell by 3.6%, according to the Bureau of Labor Statistics.
Today, the opposite is true. From November 2022 to August 2023, average U.S. wage growth outpaced rent growth by a significant margin—5.3% to 0.3%, respectively. As incomes rise faster than rents, multifamily housing remains affordable, ensuring sustained demand across markets.
4. Decreasing Unemployment Rates
Unemployment peaked at 10% during the Great Recession in 2008 and 2009, with the economy losing an average of 700,000 jobs per month during that time.
Today’s employment picture is much brighter:
- As of September 2023, the unemployment rate sits at 3.8%, near historic lows.
- In September alone, the economy added 336,000 jobs, continuing a trend of rapid job creation.
- The U.S. economy is now adding an average of 460,000 jobs per month.
Low unemployment rates and steady job growth contribute to housing affordability and demand, further supporting the multifamily sector.
Multifamily Market Fundamentals Remain Strong
Vacancy rates, rent growth, wage increases, and employment trends all point to a healthier, more resilient multifamily market than during the Great Recession. Rising interest rates and affordability challenges in the single-family market further drive demand for rentals, making multifamily properties a compelling investment.
At Countrywide, we have a proven track record in multifamily investment, development, and property management. Our team continues to deliver high-quality projects that meet market demand while providing investors with opportunities for stable, attractive returns.
Important Disclaimer
No Offer of Securities: This material is for informational purposes only and does not constitute an offer to sell or a solicitation to buy any investment. Offers are made exclusively through a confidential Private Placement Memorandum. Access to information about investments with Countrywide is limited to accredited investors under the Securities Act of 1933 or those with sufficient financial sophistication to evaluate the merits and risks of such investments. Investment outcomes vary, and past success does not guarantee future results.
