The Investment Future-Driven Multifamily Housing
- Evie Katz Palka
- 5 hours ago
- 9 min read
Key Takeaways
Continued Long-Term Demand for Rental Units
The Importance of “Core Plus” Assets
Improved ROI with Sustainable Materials
Contractor Expertise Drives Success
________________________________________________________________
INTRODUCTION
Thanks to the high interest rates for residential mortgages over the last few years, the demand for multifamily housing in today’s market continues to grow. Multifamily housing typically refers to a single building or a complex of buildings containing multiple separate dwelling units within a singular property. The most common examples include apartments, condominiums, duplexes, and townhouses, which typically offer separate living facilities, entrances, and addresses for each unit.
Unlike single-family residences, multifamily properties generally share common areas, such as parking, yards, and amenities like pools, to offer a diverse range of living options and price points for renters. These units can range from single-story to mid- and even high-rise buildings, which often feature commercial businesses on the lower floors. This mixed-use option can maximize the use of smaller commercial properties while providing additional revenue streams for property owners and developers.
Multifamily Market Overview
According to the Circularity Gap1, the U.S. multifamily market size was valued at USD $265 billion in 2022 and is expected to reach USD $466 billion in 2030, providing property owners and developers with a CAGR of 7.31% for the forecast period. For investors seeking a resilient, scalable, and inflation-protected return, multifamily real estate stands out as a compelling asset class, particularly as institutional and private capital accelerate its flow into this space.
Besides the obvious culprit of higher mortgage rates, changing demographics are also responsible for increased multifamily demand.
An increasing number of millennials and baby boomers are choosing rental over purchase to reduce ownership burdens normally associated with a single-family residence.
Urbanization continues to thrive as people seek improved opportunities and convenience in larger and emerging metropolitan areas, further bolstering the demand for multifamily housing.
The remote work arrangement and lifestyle have prompted renters to reconsider their housing needs and preferences. As a result, many renters are looking for upscale units that feature larger and more flexible spaces and better amenities.
Sustainable and eco-friendly features have become increasingly important to tenants and stakeholders, prompting developers to incorporate green building practices and energy-efficient amenities into their multifamily projects.
Other factors typically include supportive government-sponsored enterprises, such as tax breaks or community grants, as well as increased private equity investment
Multifamily Units by the Numbers
The latest Q2 2025 data suggests that the total number of US residences totaled nearly 148 million units, with approximately 43.9 million (31.4%) of the market devoted to the multifamily market.
The following breakdown represents new multifamily completions from 2015 to 20251.
2015–2019: The average annual rate of new multifamily unit deliveries was approximately 300,000.
2020: The 2020 ACS 5-year estimate placed the national total of small to medium multifamily (SMMF) units at about 28.28 million, representing a 2.7% growth from 2010.
2023: Estimated completions reached 563,000 units, just shy of the new peak set in 2024.
2024: The National Association of Home Builders (NAHB) reported that 608,000 multifamily units were completed in 2024, the highest level since 1986. Fannie Mae also reported that an estimated 550,000 to 600,000 apartment units were completed in 2024.
2025: Over 500,000 new units are expected to be completed, thanks to restructured supply chains and new workers entering the construction trades.
Understanding the New Multifamily Demand
Since the pandemic, higher interest rates, employment uncertainty, and unstable markets have prompted many potential buyers to continue renting. However, several new factors are now driving up the demand for multifamily housing.
The American Dream 2.0
The "American Dream of Homeownership" is a deeply held belief that owning a home is a crucial component of success, stability, and prosperity, offering a sense of achievement, community, and personal freedom. That vision has changed for some younger generations, who prefer the benefits of renting over owning.
Work Flexibility – should a person need to move for a new job, leaving an apartment is much simpler and faster than selling a home. The homeowner could find themselves making two mortgage payments until the old home sells.
Maintenance Chores and Costs – All buildings require regular maintenance to provide a warm, safe, and dry living environment. Instead of buying a home and paying for these costs out of pocket, renters simply notify the owner or maintenance supervisor when a problem arises.
Changing Generational Demands
Millennials and Gen Z are the primary consumers for rental housing, but Boomers and Gen X are also contributing to the increased demand.
A recent report from the National Institutes of Health2 indicates that over 60% of Boomers and 50% of Gen Xers assist their parents with various needs or provide some level of financial support. The report also suggests that these two groups are now members of the “Sandwich Generation,” which refers to individuals who simultaneously assist their adult children and parents.
During the pandemic, remote work flourished as a manageable workaround to stay-at-home orders. While many have returned to the office, Forbes3 estimates that over 32 million, or 22% of the total workforce, are still working remotely. This option enables people to reside in areas with high-quality amenities and affordable living, even if they are not located in major urban centers. Despite these workforce changes, parking remains a critical concern for multifamily housing projects. The most popular solutions include covered or uncovered parking lots, above/below-ground garages with assigned spaces, and EV charging stations.
Another key shift involves increasing wages. For the first time since the pandemic began, rent growth has slowed to 2.6% year-over-year, while wage growth has increased to 4.1%. While this can help some families achieve their dream of home ownership, many will continue to rent until other economic factors have stabilized further.
Regions with robust job creation will see a significant influx of new residents seeking rental housing, directly boosting demand for multifamily units.
Opportunities for Developers & Investors
Developers remain confident in the long-term demand for multifamily properties, resulting in significant new construction. This is particularly true in high-growth markets such as the Sun Belt and Midwest, or locations where a major employer or manufacturer opens new facilities. Common examples could include computer chip (semiconductors) manufacturing, car and airplane assembly plants, and product distribution centers.
Government-Sponsored Enterprises (GSEs) play a crucial role in providing stable, low-cost financing for multifamily projects, thereby facilitating quicker and more accessible development. Entities such as Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (FHLB) enhance the flow of credit by purchasing mortgages from lenders and then selling them to investors, thereby improving market liquidity.
Since the pandemic, a significant influx of private equity capital for multifamily housing has occurred through large investment funds, which acquire, build, renovate, and manage large portfolios of apartment buildings. These funds play a significant role in the real estate market, particularly in "value-add" strategies, where they improve underperforming assets to generate better cash flow and ultimately facilitate their sale.
Investors are also shifting capital toward newer, high-quality "core-plus" assets to generate stable cash flows and offer modern amenities that attract long-term tenants. Tenant needs have changed dramatically, thanks to the widespread adoption of new technologies and the availability of smart building features. To help mitigate potential risks during the design and budgeting phases, many investors are partnering with successful GCs who have the expertise needed for a large-scale project to be finished on time and within budget.
Suburban and secondary multifamily housing markets are experiencing strong growth due to high urban housing costs, increased remote work opportunities, and demographic shifts that enhance affordability and space. This trend has made suburban and secondary markets an attractive investment opportunity, benefiting from a growing supply of housing and emerging infrastructure in high-growth regions. These areas are attractive to many renters, particularly families, which can lead to faster rent growth and lower vacancies compared to primary urban cores.
The Design-Build Needs Advantage
One of the most common challenges for multifamily housing designers and builders is working with narrow or irregularly shaped lots, as well as difficult terrain. This is especially true for well-established metropolitan areas, where specialized engineering and construction expertise are often required to maximize a site’s potential.
The final design should incorporate features that enhance the tenant's lifestyle, including cohesive design elements, open floor plans with ample storage options, and barrier-free accessibility. Other features, such as soundproof walls, floors, and ceilings, separate entrances, and strategically placed windows, are crucial for tenant privacy.
Designated spaces for exercise and spa-like facilities can help support the physical and mental well-being of residents. These options can include pools, fitness centers, clubhouses, playgrounds, and rooftop terraces, which help foster interaction while providing the integrated amenities that today’s tenants desire.
Automation and energy management systems increase tenant comfort levels while reducing energy consumption. Access systems can be used to enhance security while maintaining high tenant privacy levels. This same technology can be used to create comfortable coworking areas that offer Wi-Fi, appealing to the growing number of remote workers.
The use of sturdy, durable, and easy-to-clean finish materials will reduce maintenance and replacement costs throughout the building’s lifecycle, thereby improving ROI for the owner or investors. Materials such as steel, aluminum, and copper, which are endlessly reusable and recyclable, are popular for meeting new green building codes while simultaneously improving LEED and Green Globe scores.
Mixed-use designs that integrate residential, office, and retail spaces help create "live-work-play" environments for tenants, while providing diverse income streams for investors and stakeholders. Multifamily projects that incorporate renewable energy sources, such as solar panels, are increasingly in demand as individuals, families, and owners seek to reduce their carbon footprint.
While no one can accurately predict the next “must-have” technology, today’s multifamily projects must also consider future connectivity needs for smart cities and the Internet of Things (IoT). These systems require a flexible cabling system that can be easily updated as new technologies become available, especially for mixed-use projects.
The General Contractor’s Evolving Role in Multifamily Housing
Due to the complexities outlined above, the best general contractor for your next multifamily project should regularly demonstrate the following skills across their project portfolios.
Integrated delivery model: Look for a contractor with a proven track record of achieving similar objectives. Integrated delivery can significantly streamline communication between owners, architects, and builders, reducing or eliminating potential project delays.
Preconstruction Services: Should include early cost modeling and constructibility reviews to ensure design objectives and budget constraints are being met. Technologies such as Building Information Modeling (BIM) and Virtual Design Construction (VDC) services can assist with value engineering to reduce timelines and construction costs. Likewise, project management platforms can be used to further improve transparency and project efficiency.
Building code compliance: The number of units directly impacts code compliance, especially for MEP Infrastructure systems and components. Prefabricated assemblies and modular units can reduce labor costs and project timelines, while ensuring compliance with building codes. The contractor must be experienced with sustainable materials and practices that meet certification standards for energy efficiency and applicable certification requirements, such as LEED.
How PREMIER Delivers Multifamily Excellence
PREMIER Design + Build Group’s work on The View at Rock Run Collection demonstrates the company’s ability to transform complex, large-scale multifamily projects into cohesive, vibrant communities. In collaboration with Cullinan Properties, PREMIER applied its full suite of design and construction expertise to bring one of the most ambitious mixed-use developments in the greater Chicagoland area to life.
Spanning 310 acres, The View combines residential, retail, dining, entertainment, office, and healthcare components into a single, cohesive environment. Its 573 garden-style apartments offer an elevated living experience, supported by amenities such as a fully equipped gym, outdoor pool with cabanas, volleyball and bocce ball courts, dedicated entertainment spaces, and a yoga platform. Strategically located with direct access from I-55, The View also connects seamlessly to the 358-acre Rock Run Business Park, providing residents and the greater surrounding community with access to thousands of local jobs and economic opportunities.
This View exemplifies PREMIER’s ability to coordinate complex developments, integrate diverse uses, and deliver high-quality, amenity-rich communities, setting a new standard for multifamily construction and demonstrating what’s possible when design, planning, and execution come together seamlessly.
Outlook for Multifamily Housing Projects
While the short-term outlook remains cautious, the underbuilding of previous construction cycles has created a nationwide shortage of multifamily projects. This shortage continues to grow, as more individuals are forced to remain renting until interest rates drop again, and as more individuals and families continue joining the ranks of the “Sandwich Generation.” In the long term, multifamily housing remains a resilient and growing asset class that will continue to fuel demand for years to come. As a result, multifamily housing can generate multiple income streams for investors, stakeholders, and the local community.
To fully leverage their ROI potential, multifamily housing requires a general contractor that can help stakeholders with the complexities associated with today’s multifamily projects.
This expertise should include effective collaboration between developers, investors, and stakeholders. Likewise, the ability to work with municipalities and their different building codes and sustainability standards can be challenging, except for the most experienced multifamily builders.
PREMIER Design + Build Group has the expertise needed to ensure that your next multifamily housing project is completed on time and within budget. With regional offices strategically located across the country, PREMIER manages one of the largest networks of material suppliers and skilled artisans. Our project portfolio currently includes over 90 million square feet of successful commercial developments, ranging from healthcare to cold storage to multifamily housing, across more than 850 different project locations across the country.
_________________________________________________________________________________
About PREMIER Design + Build Group
PREMIER Design + Build Group is a leading national design-build construction firm with regional offices strategically located in Illinois, California, New Jersey, and Ohio. With a strong track record spanning more than 20 years, PREMIER specializes in providing comprehensive solutions for industrial, commercial, healthcare, residential, adaptive reuse, and cold storage construction projects. An employee-owned company, PREMIER has an unwavering commitment to quality, innovation, and customer service that has earned it a reputation as a trusted partner in the industry.
Resources: