Northmarq's BTR research highlighted in AZBEX: Economy's problems fueling BTR benefits
MINNEAPOLIS, MINNESOTA (December 5, 2022) - The current slate of difficulties in the U.S. economy and government’s blunt but aggressive responses to address them have the potential to continue fueling growth in the Build-to-Rent (BTR) housing market. That's according to Northmarq's recently released BTR report that was featured in AZBEX.
The Federal Reserve’s continued rapid-fire interest rate hikes have had the intended effect of cooling demand in the overheated and under-supplied single-family owner-occupied market. Northmarq reports residential mortgage rates went from all-time lows to 20-year highs in less than a year, which has led to restrictions on potential buyers’ ability to purchase homes.
This bodes well for the already popular Build-to-Rent multifamily subsector. The report says, “Developers are increasing activity levels to meet this accelerating demand for an alternative form of rental housing to traditional apartments. Deliveries of single-family build-to-rent units are forecast to rise 20% in 2022, and construction starts are on pace to spike by 25%.”
BTR is not immune from risk, however, Northmarq notes that persistent inflation could ultimately impact demand, as could over-contraction in the labor market. High interest rates could also negate some developers’ and investors’ ability to produce.
Still, BTR is exceptionally well-positioned to ride out the waves of uncertainty and continue its expansion. “While uncertainty persists,” Northmarq says, “single-family Build-to-Rent housing units – particularly those in high-growth parts of the country – are likely more insulated than most other sectors of the economy. Demand for these projects is rising, renters tend to remain in place for longer periods, and transitioning to home ownership is likely to remain challenging.”
Other topics covered include:
- Market headwinds and opportunities
- The Arizona BTR market
- The DATABEX data
Northmarq is a full-service capital markets resource for commercial real estate investors, offering seamless collaboration with top experts in debt, equity, investment sales, loan servicing, and fund management. The company combines industry-leading capabilities with a flexible structure, enabling its national team of experienced professionals to create innovative solutions for clients. Northmarq's solid foundation and entrepreneurial approach have built an annual transaction volume of more than $39 billion and a loan servicing portfolio of more than $76 billion. Through the 2022 acquisition of Stan Johnson Company and Four Pillars Capital Markets, Northmarq established itself as a provider of opportunities across all major asset classes. For more information, visit: www.northmarq.com.