Fannie Mae economists have recently shared their insights on the future of Multi-Family construction in the United States. Multi-family construction is expected to slow by 22 percent in 2024, down to 389,000 units nationally, down from approximately 475,000 units in 2023. Will this be the case for Northwest Arkansas?
Fannie Mae’s forecasters attributed this slowdown in Multi-Family construction to several factors. These include slow rent growth on a national level, more normalized vacancy rates, and stricter construction and development loan lending standards.
Northwest Arkansas has a significantly lower vacancy rate of 2.2% compared to the National average of 6.4% in the first half of 2023. During the first half of 2023, NWA issued $263.1 million in building permits, which led to a 0.6% increase in the vacancy rate from 2022. A total of 20 new apartment complexes are coming to NWA, adding an additional 18,700 new units.
As our region experiences growth and mortgage rates rise, we anticipate an increase in the number of residents choosing to rent. This creates more opportunities for Multi-Family rentals, and we expect to maintain lower vacancy rates in Northwest Arkansas than the national average.
Sources:
U.S. Census Bureau
St. Louis FRED Economic Data
The 48 th edition of the Skyline Report
https://multifamily.fanniemae.com/
