We expect national multifamily fundamentals to bottom out in early 2021 and to recover by mid-2022 with smaller markets leading the recovery in early 2022 followed by major metros. The long-term outlook for multifamily remains strong, with both rent and vacancy expected to recover to pre-COVID levels by Q2 2022.

Riding strong pre-COVID demand, and supported by generous federal and state stimulus packages, multifamily fundamentals were only modestly impacted by pandemic-related economic shocks in Q2 2020. The long-term outlook for multifamily remains strong, with both rent and vacancy expected to recovery to pre-COVID levels by Q1 2022.

Based on preliminary data, CBRE EA estimates a Q2 2020 vacancy rate of 4.6% for our national sample of professionally managed multifamily properties, up 70 basis points (bps) year-over-year and 40 bps quarter-over-quarter.

Multifamily fundamentals are projected to follow a similar shape as the U.S. economy over the next two years: a sharp downturn followed by a quick recovery.

Though apartment fundamentals are expected to hit their weakest points one quarter later than employment, they are also projected to return to pre-COVID levels more quickly, hitting Q1 2020 levels one quarter earlier, in Q1 2022.

Based on preliminary data, we estimate a 4.3% vacancy rate for CBRE EA’s national sample of professionally managed apartments in Q1 2020—down 30 bps year-over-year and up 20 bps quarter-over-quarter.