Market Confidence Wavers, Toll Brothers Expands: May Multifamily News Roundup

Market Confidence Wavers, Toll Brothers Expands: May Multifamily News Roundup

We have summarized the biggest multifamily real estate from May of 2022. In May, rents continued to grow, builders struggled to keep up with demand, and environmentally-conscious apartment complexes continue to be popular with renters.

Confidence in the Market Wavers

The National Association of Home Builders Multifamily Production Index has fallen six points
since last quarter to 48, below 50 for the first time in three quarters. On the 100-point scale, any
number below 50 indicates that builder and developer confidence is waning, and that conditions
are worsening. Inflation, high interest rates and high home prices are driving more and more
families into the already strained rental market. Construction costs continue to rise with supply
chain issues, rising interest rates and inflation, and the impact on affordability is a cause for

Government-subsidized affordable housing undercuts growth; otherwise national rent
prices increased another $15 to record highs. These concerns are not reflected in housing starts
for May, which are still up. However, the MPI is usually a good predictor of future performance
in the market.

Toll Brothers Makes Gains and Expands

The National Multifamily Housing Council has named Toll Brothers Apartment Living (the
rental division of Toll Brothers) one of the largest multifamily developers in the United States. It
is now ranked 11th in the country, having started 3,621 units in 2021, a 416% increase from
2020. With Prudential Financial’s PGIM Real Estate Unit, Toll Brothers recently financed a
$226M loan to construct a 34-story, 432-unit rental building in downtown Boston. Last year Toll
and PGIM teamed up to build an apartment complex in Atlanta.

Sandra Thompson and Julia Gordon Confirmed

Sandra Thompson has been confirmed as director of the Federal Housing Finance Agency
(FHFA) by a 49-46 Senate vote which largely followed party lines. Thompson had been serving
as acting director since last June. Julia Gordon was confirmed as commissioner of the Federal
Housing Administration and sworn into office on May 20. The Biden-Harris administration’s
housing team is shaping up, as mortgage rates rise and the affordable housing crisis escalates.

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