Are We at a Tipping Point in the Multifamily Market?

• Renter’s market: Several factors are shifting the balance of power toward renters and the trend may continue for some time.

• Private industry: A large industrial REIT has been acquired at a premium and will now will become a private company.

• Head to Fannie: The CEO of Fannie Mae abruptly stepped down, a move that could signal the agency is preparing to return to public ownership.

• Upcoming webinar: Multifamily operators are using automation to streamline management, enhance security, and improve the resident experience. Sign up

Editor’s Pick

Are We at a Tipping Point in the Multifamily Market?

Rent growth slows to near-decade low

We may have reached the moment where renters seem to hold more cards than landlords—and the shift may not be temporary. After years of outsized rent growth driven by supply constraints and pandemic-era housing disruptions, the multifamily sector is showing signs of fatigue. Data from RealPage show asking rents grew just 0.2 percent year-over-year—the lowest annual gain in nearly a decade. Even more striking, Yardi reported a $6 drop in average U.S. multifamily rent in September to $1,750, marking the sharpest monthly decline since 2009. What if landlords were no longer in the driver's seat when it comes to rent? What if renters were?

At the same time, home-ownership looks to be regaining ground. Multiple forecasts suggest that mortgage rates, now stubbornly high near 6.2 percent for a 30-year fixed, may drift lower—potentially into the mid-5s by late 2026 if inflation and economic growth soften. Historically, a drop below 6 percent has triggered a surge in home-buying. One estimate suggests an easing to that level could bring six million additional households into the ownership pool. The problem for landlords is that lower borrowing costs turn renters into buyers and lessors into competitors for the same square footage.

All of this means the multifamily playbook must evolve—or face obsolescence. Owners long operating on the assumption that renting will retain its affordability edge may find that advantage shrinking fast. With supply still elevated—the U.S. had roughly 686,000 apartments under construction as of late August, a 20 percent year-over-year drop but still massive in absolute terms—landlords are squeezed on both sides: competing supply and rising ownership appeal. Some REITs are already sounding the alarm. Certain Sun Belt portfolios served by Mid-America Apartment Communities are witnessing negative effective rent growth as supply pressure mounts.

What we’re seeing is less a collapse and more a recalibration. Multifamily has entered a phase where the go-forward strategy is less about finding rent growth and more about protecting occupancy, tightening concessions, and choosing capital deployment very carefully. The winner won’t be the largest portfolios, but the most nimble. Tech-enabled operations, resilient locations, and agile leasing strategies may matter more than ever. Because the truth is, the renter’s market of the past few years didn't get built on rent hikes alone—it got built on scarcity. As that scarcity fades and ownership becomes plausible again, landlords will need to ask: Have I been managing assets well or just riding the supply constricted tailwind?

Overheard

Ares Bets on Industrial Undervaluation with $2.1 Billion Plymouth Deal

Plymouth Industrial REIT is going private in a $2.1 billion deal led by Ares Management and Makarora, valuing the company’s stock at $22 a share—a hefty premium to where it was trading earlier this year. The deal adds roughly 30 million square feet of industrial space to Ares’ platform and continues the trend of large private equity players scooping up smaller public REITs. With industrial rent growth slowing from its pandemic highs, the acquisition signals a shift from growth plays to value hunting.

Based on Plymouth’s most recent filings, the portfolio averages around 30 million square feet, putting the transaction at roughly $70 per square foot. That’s lower than the national industrial average of around $108 to $128 per square foot and well below what Prologis and Rexford command for their Class A holdings—often north of $200 per square foot in coastal markets. The relatively modest valuation reflects Plymouth’s focus on secondary logistics hubs and older properties, where rents are still catching up to newer construction.

For Ares, that discount could be the entire thesis. The portfolio’s below-market rents and limited institutional ownership make it ripe for repositioning. If they can lift occupancy or push rents toward market averages, the upside could be significant. The deal also underscores how private buyers are exploiting the valuation gap between public REITs and private-market assets—a trend likely to continue as long as smaller industrial REITs trade below net asset value.

Fannie Mae CEO Exit Signals a Shift Toward Wall Street

Fannie Mae is entering another leadership transition as CEO Priscilla Almodóvar steps down after less than three years at the helm. The government-sponsored enterprise announced her exit without naming a permanent replacement, instead elevating a trio of interim leaders to run the mortgage giant while it searches for a new chief. The change comes as Washington again debates the future of Fannie Mae and Freddie Mac—specifically, whether the two mortgage guarantors will ever return to public ownership after more than fifteen years in federal conservatorship.

Almodóvar’s tenure was marked by a push to expand access to credit and address racial inequities in home lending. Before joining Fannie Mae, she led the nonprofit Enterprise Community Partners and previously served as president and CEO of the New York State Housing Finance Agency. Those credentials earned her respect among housing advocates but may have limited her ability to steer a company preparing for public markets. Fannie Mae’s mandate to balance affordability with financial performance has always been difficult, and the political pressure to maintain its mission often clashes with the discipline investors demand from a publicly traded firm.

Almodóvar’s political roots lie in the Democratic establishment—she served as deputy policy director for former New York Governor Eliot Spitzer’s campaign in 2005—aligning her with housing equity and affordability causes. That orientation could signal why her departure may clear the way for leadership with more Wall Street experience or bipartisan appeal as policymakers revisit Fannie Mae’s structure. If the next CEO is chosen with capital markets expertise in mind, it will likely mean the company is inching closer to a return to private ownership, with less focus on social impact and more on investor confidence.

Upcoming Webinar

Are You Enjoying This Newsletter?

Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

📧 Forward it to a friend and suggest they check it out.

🔗 Share a link to this post on social media.

🗣 Have ideas for future topics (or just want to say hello)? Share your feedback and tips at [email protected] or connect with us on X through @propmodo.

✅ Not subscribed yet? Sign up for this newsletter here.

📫️ Please add our newsletter email, [email protected], to your contacts to make sure you don’t miss any updates.

Enjoy reading about trends and innovation in commercial real estate? Subscribe to Propmodo.com for unrestricted access to reliable, data-driven journalism and exclusive insights available only to subscribers.