Freddie Mac 2015 Annual Report Download - page 60
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Management's Discussion and Analysis Our Business Segments | Multifamily
Freddie Mac 2015 Form 10-K 58
MARKET CONDITIONS
The graphs and related discussion below present certain multifamily market indicators, for the most
recent five years, that can significantly affect the business and financial results of our Multifamily
segment.
Change in Effective Rents for Period Ending
December 31,
Source: REIS, Inc.
Apartment Vacancy Rates as of December
31,
Source: REIS, Inc.
Commentary
• Effective rents (i.e., the average rent paid by the tenant over the term of the lease, adjusted for
concessions by the landlord and costs borne by the tenant) remain strong, but the rate of increase is
expected to moderate in the future, consistent with the rise in vacancy rates. Vacancy rates increased
slightly since 2013 from what is likely the cyclical low.
• Multifamily property prices have been especially strong, with 13% growth in 2015. Multifamily property
price growth may slow from this level with the expected moderation in the rate of effective rent
increase, the rising vacancy rate, as well as improving returns for other investment types.