Housing Supply Shortage Will Support Apartment Demand

Are We Facing Another Housing Bubble?

• SF home prices up 15% YOY; Up 38% from two years ago
• Unlike overbuilding and speculation leading up to Financial Crisis, housing has been underbuilt recently
• Lack of housing units weighs on household formation, creating pent-up demand and driving price growth

Homeownership Becoming Increasingly Unattainable

• Leading up to the pandemic, about half of households could afford a median priced home
• Skyrocketing prices have made the same home affordable to roughly 26% of households
• Rising interest rates could further shrink this number

Apartments Remain an Affordable Alternative

• Average Apartment rent remains $638 lower than median home payment; rose at half the rate over last 2 years
• Housing shortage and demographic trends will sustain low vacancies and rising rents
• Investors can expect aggressive bidding for Apartment properties despite rising interest rates

*Forecast
Forecast using Moody’s June 2022 baseline forecast
SF=Single-Family, MF= Multifamily
Sources: Marcus & Millichap Research Services, U.S. Census Bureau, RealPage, Inc., Moody’s Analytics

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