The organization’s Midyear Outlook foresees record-setting origination volume as demand for multifamily continues to rise. 


Rising rents and falling vacancies are helping fuel strong investor demand in the multifamily sector and should lead to record-setting origination volume between $385 billion and $410 billion for the year, according to the Freddie Mac Multifamily Midyear Outlook.


  • Freddie Mac Multifamily notes rapidly improving economic conditions and loosening of restrictions throughout the country have improved the outlook for the multifamily market. The report notes that a year after the pandemic caused the economy to bottom out in the second quarter of 2020, GDP, total employment, unemployment rates and jobless claims have all improved significantly. While there are concerns about more virulent strains of COVID-19 impacting areas with lower vaccination rates, the general consensus is the growth in the U.S. economy is expected to continue this year and likely into 2022.

  • Freddie Mac also looked at the top and bottom 10 metros by gross income growth for 2021 and found the top 10 are primarily stable Midwest markets and higher-growth Sun Belt areas: Memphis, Tenn.; Albuquerque, N.M.; Las Vegas; Cleveland, Ohio; Tampa, Fla.; Phoenix; Sacramento, Calif.; Oklahoma City, OK;  Greensboro/Winston-Salem, N.C.; and Indianapolis.

  • The bottom 10 metro areas for gross income growth this year are Washington, D.C.; New York; San Francisco; Miami; Boston; San Jose, Calif.; Orlando, Fla.; Minneapolis; Los Angeles and Portland, Ore. Projected vacancy rates range from 6.1 percent in Oklahoma City to 2.4 percent in Albuquerque for the top 10 metro areas and 9.9 percent in Washington, D.C., to 3.9 percent in New York for the bottom 10 metros.

  • The 2022 Multifamily Outlook report noted that demand for existing multifamily properties will remain strong, following the second and third quarters of 2021 that saw the highest levels of demand ever recorded. Alongside growing demand, Freddie Mac’s report also said there were more permits and construction starts recently, adding that community completions should also remain high.

  • According to property data and analytics company REIS, rent growth for 2021 is expected to be near a record-breaking 10 percent, with the vacancy rate falling to 4.8 percent. For 2022, Freddie Mac is projecting the vacancy rate to remain flat at 4.8 percent, while rent growth will be seen in all 74 U.S. markets that the organization covers.

Rent Growth Across the Board

  • Steve Guggenmos, vice president of Multifamily Research & Modeling at Freddie Mac, said in prepared remarks that the organization is expecting rent growth in all markets in 2022 due to strong demand that’s driven by the improving economy.

  • Chart and data courtesy of Freddie Mac

    Chart and data courtesy of Freddie Mac


    • The metros that are expected to see the highest rent growth for 2022 include Phoenix at 8.2 percent; Tampa, Fla., at 7.7 percent; Las Vegas at 7.4 percent; and Tucson, Ariz., at 7.1 percent. According to the report, the top 10 markets expected to overperform in rent growth are the secondary and tertiary Sun Belt markets on the West Coast and in Florida.

    • On the other hand, markets with the weakest projected rent growth are mostly in the Midwest or the northeastern portion of the U.S. Places like the suburbs of New York City and Milwaukee are expected to see the lowest rent growth, which is roughly 2 to 2.5 percent, for 2022. The Northeast and Mid-Atlantic markets are also expected to see some drops in vacancy rate, like in Washington, D.C. and Boston.

    More Investment Than Expected

    • Alongside rent growth, Freddie Mac is projecting originations for the multifamily market to also continue growing, hitting between $475 billion and $500 billion in 2022 and building off the momentum from 2021. The organization originally projected in its mid-year report that 2021 would see between $385 billion and $410 billion in originations. However, Freddie Mac has since adjusted that figure and is expecting originations for the multifamily market in 2021 to end up at $450 billion, which is also an increase from the $360 billion mark in 2020. The growth in total origination volume is expected to continue for 2022 considering the current strength and demand for the multifamily market, just at a slower rate of roughly 5 to 10 percent.

  • Chart and data courtesy of Freddie Mac

    Chart and data courtesy of Freddie Mac


    • Overall, Freddie Mac’s 2022 multifamily forecast noted that strong economic conditions and unprecedented levels of demand for multifamily housing has led to strong conditions in 2021. However, the report also mentioned that 2022 still had uncertainties, more specifically increasing inflation and the more transmissible Omicron variant of COVID-19 potentially slowing down economic conditions. Even with the uncertainties, Freddie Mac still expects the U.S.’ multifamily market to see continued growth for the short term.

    All the best!


Demetrius L. Brown

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