Rising Multifamily Project Starts and Normalizing Construction Costs Create Hopeful Tailwinds

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“Will Real Estate Ever Be Normal Again?”

That was the headline for an article in the New York Times, not last week, but in November 2021. The article documented early COVID distortions in the single-family market, with skyrocketing prices and intense competition among buyers.

In the multifamily industry, we are still asking that question.

Housing market predictions are a topic of much debate among experts. Housing construction – single-family and multifamily – is strong. Multifamily starts are up and construction costs are moderating, while at the same time, higher rates and higher labor, insurance, and other costs make deals much harder to pencil. There is a sense, but not a consensus, that rates and costs will come down in 2024, as will multifamily production as projects are completed and fewer projects get underway.

Where are we going?

It has been a long time since we saw a business cycle that went anywhere but up. We don’t really know when it will be “normal” again, but we can be sure that it will. Business cycles still happen, and the laws of economics haven’t been repealed. Rates will fall, costs will moderate, and demand for housing in the U.S. will not abate. “Normal” will no doubt be the “new normal” but it will come around again.

Multifamily remains a great investment class.

Multifamily housing has distinguished itself from other asset classes through all economic cycles and has been viewed as a safe haven during recessionary cycles. As we look ahead to 2024 and beyond, there’s no reason to think this will dramatically change. Those who can create and execute good deals will continue to come out ahead.

When you need a trustworthy partner on your side, count on AGM.

As a family-owned FHA lender and GNMA seller/servicer with over 30 years of experience, we know the multifamily CRE lending process inside and out. You’ll enjoy an easy, personalized experience and continuity throughout your transaction with a single, knowledgeable point of contact. From new construction and substantial rehab to acquisition or refinance — for both market-rate and affordable projects — we go to bat for our clients to bring deals to their successful completion. That’s probably why more than 60% of our borrowers are repeat clients. Count on our experienced team to guide you through the FHA financing process and help you get the deal done.

Whether real estate returns to normal or is on the threshold of a new normal, FHA financing is the smart, secure solution. AGM will partner with you to get an attractive multifamily loan you can count on. Please contact our helpful team today.


About AGM Financial

Founded in 1990, AGM is a leading FHA lender and GNMA seller/servicer. From new construction and substantial rehab to acquisition or refinance — for both market-rate and affordable projects — AGM gets the deal done. Family-owned with over 30 years of experience, the firm has closed over $9 billion in FHA-insured multifamily project loans nationwide. We underwrite, fund, and service all of our loans. Developers and owners can count on AGM to be accessible, transparent, consistent, and ready to lend. From new construction to substantial rehabilitation to acquisition and refinance — for both market-rate and affordable projects — we can get the deal done. To learn more about AGM, call 800.729.4266 or visit agmfinancial.com.