Odd Lots Get Ready For Another Shock to Housing Affordability
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Jan 30, 2025 
Lee Everett, Head of Research and Strategy at Cortland, sheds light on the troubling future of housing affordability. He discusses how rising interest rates have dramatically reduced new apartment development, leading to an impending supply crisis. Everett highlights the combined impact of labor shortages due to deportations and escalating insurance costs, all while rent prices have just begun to stabilize. With economic tensions mounting, a new shock to housing affordability could be on the horizon, affecting renters and buyers alike.
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Housing Affordability Paradox
- Rent price growth is moderating, approaching pre-COVID levels.
- However, high interest rates have caused a plunge in new apartment construction, limiting future supply.
Developer Stress
- Established multifamily developers are managing high rates but face valuation hits.
- Newer players face greater stress and potential delinquencies due to overextension.
TikTok Landlord Bust
- Some newer multifamily syndicators, particularly those who overextended during the low-rate environment, are facing significant financial distress, including lawsuits and investigations.
- Banks and debt funds are seeking to offload these troubled assets and return to more reliable sponsors.