Why Multifamily Investments Are Ideal for 2025: A Broker’s Perspective

If you’re in the mortgage industry—whether as a broker, lender, or wholesale partner—you know that real estate moves in cycles. Right now, we have almost crossed an important threshold for some of the finest investment opportunities in years. After sky-high interest rates and a jump in construction activity, we are now entering a new phase in the multifamily market, where supply & demand dynamics are shifting, affordability issues are rising, and the outlook for rent growth is looking strong. Projections indicate that rent growth will come out in a favorable position, assuring stability and returns for the multifamily sector in 2025. Having a good understanding of the multifamily outlook for 2025 will allow you to empower your clients with the knowledge essential for smarter and more profitable decision-making.

But here’s the big picture: The American dream of homeownership is transforming. As the average age of the first-time homebuyer keeps rising, the market might be pulled in different directions due to economic factors such as potential tax cuts, tariffs, or inflationary pressures. Meanwhile, the balance between supply and demand in multifamily projects is shifting, bringing in both new challenges and golden opportunities for investors. With this uncertainty, having the right insights can mean the difference between hesitation and taking advantage of emerging trends at the right time.

At RCN Capital, we’re here to help you stay ahead. In this blog, we’ll dive into how multifamily real estate trends are shaping it up to be a standout investment in 2025, supported by data, market analysis, and carefully prepared tips for your use.

Why Multifamily Investments Are a Smart Bet for 2025

Let’s begin with the particulars: why is the multifamily market so hot right now? The answer lies in a swirl of demographic changes, the economy, and supply-demand equilibrium. Here’s what you need to know:

1. Demographic Shifts Driving Demand

The U.S. is going through some huge demographic shifts, causing an increase in rental housing demand. The Baby Boomers, numbering 76.4 million, are downsizing or retiring, while 73 million Millennials are now in the prime renting ages; this has made multifamily housing stronger than ever. The entry of the Gen Z formation of households also increases the demand for rental properties.

• Why it matters: These generational trends are creating a sustained need for multifamily housing, making it a stable and lucrative investment.
• Stat to note: By the end of 2025, the U.S. is expected to absorb 487,000 multifamily units, the third-highest annual total on record.

2. Affordability Challenges in Homeownership

High home prices and elevated mortgage rates are pushing more Americans toward renting. In fact, it's much more expensive to own a home than to rent one nowadays, 25% higher in most markets, while apartments remain within reach renting options. This affordability gap should remain constant, especially when mortgage rates hover in the 6-7% range.

• Why it matters: As homeownership becomes less accessible, the demand for rental units will continue to grow, driving up occupancy rates and rental income.
• Stat to note: A Redfin survey found that 38% of renters don’t believe they’ll ever own a home, up from 27% just a year ago.

3. Supply-Demand Imbalance

While demand for multifamily housing is surging, new construction is slowing down. It is anticipated that in 2025, only 341,000 new units will be delivered compared to 671,000 units being completed in 2024. This tightening of supply is almost certain to reduce vacancy rates and increase rental rates.

• Why it matters: A shrinking supply pipeline means more competition for existing properties, making rental investments more attractive.
• Stat to note: The national vacancy rate is projected to fall to 1% in 2025, down from 5.9% in early 2024.

Key Multifamily Trends to Watch in 2025

Now that we have talked about "why," let’s take a look at the trends affecting the multifamily market in 2025. This will allow you get insights to help put your clients in a better position to win:

1. Rising Rents and NOI Growth

With demand far outpacing supply, rents will steadily advance in 2025. Orlando, Miami, and Dallas-Fort Worth are pushing above-average rent growth. Homes in these areas have better net operating income (NOI) and the potential for value-add enhancements with multifamily investments.

• Why it matters: Higher NOI means better returns for investors, which can translate to more business for brokers and lenders.
• Stat to note: CBRE predicts an average rent growth of 2.6% in 2025, with some markets seeing even higher increases.

2. Sun Belt Markets Continue to Shine

The Sun Belt region remains a hotspot for multifamily investments. Strong job growth, alongside a population influx into cities such as Dallas, Phoenix, and Atlanta, continues to spur demand for rental accommodations. These cities are characterized by a unique combination of affordability and growth potential.

• Why it matters: Focusing on high-growth markets can help your clients achieve better returns and faster portfolio growth.
• Stat to note: Dallas-Fort Worth ranks #2 in the National Multifamily Index, thanks to robust job growth and a thinning supply pipeline.

3. Distressed Properties Present Opportunities

High interest rates continue to present challenges for property owners seeking to maximize refinancing opportunities. In turn, this offers investors the opportunity to acquire distressed or underperforming properties at discounted prices. These value-added opportunities can deliver significant returns when well-managed.

• Why it matters: Helping your clients identify and capitalize on distressed properties can set you apart as a trusted advisor.
• Stat to note: Approximately $769 billion in multifamily loans are set to mature between 2025 and 2027, creating a wave of refinancing challenges.

4. Institutional Investors Are Returning

After the slowdown of 2023-2024, institutional investors will re-enter the multifamily market in 2025 in droves, which will boost transaction volumes and raise property valuations.

• Why it matters: Increased investor activity can create more opportunities for brokers and lenders to facilitate deals.
• Stat to note: Multifamily remains the top capital recipient in U.S. commercial real estate, accounting for 7% of total trades.

How Brokers Can Capitalize on Multifamily Trends

As a broker or wholesale partner, you are uniquely positioned to influence your clients on multifamily real estate market prospects. Here’s how to add value:

1. Educate Your Clients

Share insights into the outlook for the multifamily sector in 2025 and how it aligns with your client's investment goals. Support your assessment using data and market trends to build trust and credibility.

• Pro Tip: Highlight the benefits of investing in high-growth markets like the Sun Belt or targeting distressed properties for value-add opportunities.

2. Leverage Technology

BLN Software by RCN Capital allows wholesale partners to find the most effective financing solutions for your clients so that they can obtain financing rapidly and efficiently.

• Pro Tip: Emphasize the importance of speed and transparency in today’s competitive market.

3. Focus on Cash Flow

With the current expectations of steady interest rates, your immediate attention should be on properties with strong cash flow. Assist your clients in pinpointing assets with high NOI and low expenditure.

• Pro Tip: Encourage clients to focus on properties with stable occupancy rates and rent growth potential.

4. Build Strong Relationships

Trust is the foundation of any successful partnership. If you deliver on your promises and provide your clients with good service, you will become their go-to resource for future financing needs.

• Pro Tip: Stay in touch with your clients regularly, offering updates on market trends and new opportunities.

Why RCN Capital is Your Ideal Partner

At RCN Capital, we help wholesale partners like you build trust among real estate investors. Here's what we can do to support you:

• Fast and Reliable Service: We can close loans in as little as 10 business days, allowing you to meet tight deadlines and keep promises to investors.
• Broker-Friendly Programs: Whether through our Broker Referral Program or correspondent lending opportunities, we stand behind your growth and success.
• Award-Winning Technology: BLN Software helps make the loan more streamlined, allowing you to offer a more cohesive experience for your clients.
• Commitment to Transparency: We believe in clear, honest communication at every stage of the process.

Final Thoughts

The multifamily real estate market shows strong potential in 2025 due to changing population patterns, rising housing costs, and diminishing vacancies. The upcoming market conditions create an exceptional chance for brokers and wholesale partners to direct their clients toward these rewarding investments while establishing enduring partnerships.

At RCN Capital, we’re here to help you every step of the way. Whether you’re looking to streamline your operations, enhance client experiences, or grow your business, we have the tools and expertise to support your goals. Let’s work together to make 2025 your best year yet.

Ready to Explore Multifamily Opportunities?

If you’re ready to capitalize on the multifamily market in 2025, RCN Capital is here to help. Contact us today to learn more about our broker-friendly programs and how we can support your success. Let’s innovate, grow, and thrive together!