If 2023 and 2024 felt like trying to run a marathon in quicksand, you weren’t alone. High interest rates, frozen deal flow, and investor hesitation defined the year. But here we are, midway through 2025, and something important has changed: the market is not just recovering; it’s gaining momentum.
According to McKinsey’s Global Private Markets Report 2025, private real estate is finding its rhythm again. And for those of us focused on multifamily, the indicators are especially promising.
Here are four reasons we believe the market is on the upswing, and why investors are beginning to re-engage at this strategic time:
1. Deal Volume Is Back, and Multifamily’s Leading the Way
Let’s start with transaction activity. Global real estate deal volume rose 11% in 2024, reaching $707B. But here’s the headline for us: U.S. multifamily deal volume alone surged 33% in Q1 2025 compared to the year before.
That’s not just a rebound; it’s a reset.
Lower interest rates, a slowdown in new construction, and stronger buyer-seller alignment are fueling this shift. More deals are getting done, which means values are being confirmed in the open market (not just estimated on spreadsheets). This creates a more stable, transparent environment for everyone, especially passive investors looking for clear, data-driven entry points.
Source: CBRE Research, CBRE Econometric Advisors, MSCI Real Assets, Q1 2025
2. Pricing Is Stabilizing
Last year was a rollercoaster, but we’re finally seeing firm ground underfoot. The NCREIF Property Index, which tracks property-level returns, turned positive in 2024 thanks to steady rents and fewer distressed sales.
Sellers aren’t accepting just any offer anymore, and buyers are underwriting future income with more confidence. This pricing clarity matters: it encourages sidelined capital to come back into the market and supports stronger, more predictable returns.
In short: when prices stop falling, confidence returns, and with it, opportunity.
3. Supply Is Tightening, and That’s Good News for Owners
One of the biggest tailwinds in multifamily right now is supply. Or rather, the lack of it.
New construction has dropped dramatically. Across asset classes, we’re seeing the lowest levels of development since 2018. In multifamily specifically, the number of units currently under construction is 50% lower than the peak two years ago.
That’s creating a built-in buffer for existing assets. With fewer new options hitting the market, landlords can retain tenants more easily, offer fewer concessions, and raise rents in a measured way, especially in strong job-growth markets.
This constrained pipeline protects cash flow and positions current owners to benefit as demand returns.
