Market Signals: Multifamily Insights from NASDAQ

Multifamily professionals constantly evaluate and reevaluate how the broader economy is affecting the industry. It’s part of the territory for operators and investors alike. 

Sometimes, however, it’s beneficial to seek an outside perspective. The 2025 Entrata Summit session Market Signals: Multifamily Insights from NASDAQ provided key takeaways as to how the sector fits into the economy as a whole. 

Jason Peters, Director at NASDAQ, discussed how homeownership trends, interest rates, the current labor market and additional factors are impacting multifamily. Ultimately, he said, multifamily remains in a favorable spot due to its resilience to economic volatility, but many nuances exist. 

Homeownership trends

Inventory for single-family homes in the U.S. is increasing but remains low, according to Peters. Pricing remains elevated but is coming down somewhat. Overall, homeownership remains elusive to many middle-class earners, who often opt to rent. 

Further constraining the for-sale supply is the fact that approximately 40% of Baby Boomers own their home, and in the current interest rate environment they are opting to stay put. These factors, coupled with the idea that many younger generations aren’t as focused on homeownership as their predecessors, help rental housing to remain an attractive option. 

Interest rates

Mortgage interest rates are currently in the low 6% range, which is high when evaluating the past 15 years but about normal based upon historical trends. The Fed Reserve cut of 25 basis points on Sept. 17 will likely prompt more refinances of homes, but perhaps not to a large degree. Refinances generally mean homeowners will stay in their homes longer, which can decrease supply and prompt more potential homeowners to continue to rent. 

Two more rate cuts are expected this year with another in January, but their potential impact is difficult to forecast. Peters said even looking ahead a few months to January is “aggressive” from a market evaluation standpoint. 

“It’s likely going to free up more opportunities for refinancing,” Peters said. “We’ll have to see how many rate cuts we get, but it could get more people out of their homes. That could be a problem for the multifamily space, because it could potentially get some people moving on the home front and out of their apartments.” 

He said lower rates will produce positive effects for the rental-housing industry, as well, because they will lower development costs and allow investors to borrow more capital. 

Potential risks

While few economic trends could currently be considered alarming, many are worth monitoring for their potential impact on multifamily, according to Peters. 

For instance, the current unemployment rate is hovering at 4.3%. While the target for a healthy economy is 4.5%, the gradual uptick of the current rate is unsettling to some. Consumer spending remains healthy for the moment, Peters said, but could potentially dissipate. That’s partly because tariffs haven’t produced a pronounced impact yet, as large companies have often eaten the initial cost. But that practice likely won’t keep up. 

Inflation always remains a risk if rates are cut too much and lead to aggressive consumer spending, he said. Geopolitical risks should always be considered, as well, but these usually have short-term impacts, according to Peters. 

“If we continue to cut and inflation comes back, that’s going to be a problem,” Peters said. “It might take a long time, but that’s one of the areas that is feared a little bit. With geopolitical factors, they are always present, but the market typically shakes those off in relatively short fashion.”

Stock market factors

The stock markets continue to grow, and that is indicative of an economy that will generate demand for apartments. The S&P 500, a stock market index tracking the stock performance of 500 leading companies listed on stock exchanges in the U.S., has grown 19% year-over-year. The growth is spurred by AI optimism, Capex spending growth, strong earnings and the highly anticipated Fed rate cuts. Even periodic sharp declines shouldn’t be too alarming in an overall healthy market, Peters said. 

“We often see violent moves to the upside following a sharp decline,” Peters said. “So, if you’re interested in putting some money to work and you see a sharp downturn, if it’s rather quick and we’re still in this bull market, chances are you are going to get that back and then some.”

Another positive trend for the multifamily market is that rent growth has significantly outpaced U.S. house prices since 2000 (approximately 295% to 220%). Overall, according to Peters, the sector remains healthy for investment despite a few mild headwinds.