The big news for the small multifamily market is cap rates have averaged 6.0% for the third quarter. During the three months, the average cap rate was below its six-year high. They are up 31 basis points from the same time last year and 98 basis points above the “cyclical low point set in 2023.” The risk premium above the 10-year Treasury yield increased by 42 basis points to 201. That’s a revision to a pre-pandemic norm.
The National Multifamily Housing Council largely agrees. Markets are the seventh loosest by their measure since July 2020. But sales volume and equity financing have improved significantly since October and debt financing is in a stronger position. The CRE Finance Council found that 85% of those polled expected positive impacts. That is the highest since the third quarter of 2022.
