Every year since 2018, I’ve made public predictions about what I believe the coming year will bring for multifamily real estate investment. And every year, I go back and score myself.
This exercise matters to me. It reinforces our commitment to straightforward and transparent communication with investors. It also forces discipline around how we think about risk, fundamentals, and long-term capital allocation. Markets rarely unfold exactly as anyone expects—but good investment frameworks should still hold up when conditions evolve.
Predicting 2025 was particularly challenging. The industry entered the year still grappling with the aftereffects of COVID-era policy decisions, stubborn inflation, record levels of new supply, and uncertainty around interest rates. Politics added to that complexity with the return of Donald Trump to the White House and the wide-ranging implications of proposed tariffs, tax policy, and immigration changes.
I shared my 2025 predictions not to signal short-term trades, but to show how Origin’s long-term perspective on multifamily informs our investment strategy. We don’t invest based on a single year’s outcomes—we invest based on durable fundamentals.
Here’s how I scored my accuracy for 2025. Each prediction is worth 10 points; my grade appears next to each original prediction and is aggregated at the end.
1: Multifamily rental markets will return to positive year-over-year rent growth. (8/10)
Grading this first prediction is as challenging as it gets. Data shows that rents returned to positive year-over-year growth nationally and in many markets across the country, including markets Origin targets. Semantically, it was correct.
Yet it’s a hollow level of accuracy that isn’t worth a victory lap. The depth and timing of rent growth was weaker in many markets across the country.
An unprecedented wave of new product deliveries, including projects that had been delayed for various reasons, created an oversupply in certain markets. In turn, concessions increased. In the near term, the increased supply was at a level where lease concessions were necessary. As a result, rent growth occurred at weaker levels than expected throughout the year.
2: The 10-year Treasury yield will hover around 3.75% to 4.75%. (10/10)
This prediction has been widely misunderstood, so it’s worth clarifying. My forecast was not about mortgage rates; it was about the 10-year U.S. Treasury, the benchmark that underpins cap rates, discount rates, and real asset valuations.
Throughout 2025, the 10-year yield largely traded within this range, with periodic volatility driven by inflation data, fiscal concerns, and political uncertainty. Importantly, the rate neither fell meaningfully below this band, nor did it trend decisively higher for sustained periods.
Market optimism at the start of 2025 assumed rapid and repeated rate cuts from the Federal Reserve. That scenario did not materialize. Instead, the “higher-for-longer” environment persisted—exactly the regime this prediction anticipated.
3: Realized losses in all real estate loans will accelerate over 2024. (7.5/10)
Distress became more visible in 2025 as loan maturities from the 2020–2022 vintage came due. The era of “extend and pretend” began to fade, exposing underwriting assumptions made under historically low interest rates.
Data suggests the “extend and pretend” era is under significant pressure and may be fracturing, though it hasn’t completely vanished. There is still plenty of “pretending” going on, but the “extending” part is failing to keep up with the volume of maturing debt. As 2025 progressed, extending became more relationship driven and focused on high quality assets with high quality sponsors. For many this created a stark decision: either repay the loan or reap the consequences which would be decided through the workout process.
This trend was most acute in office and certain retail segments, but multifamily was not immune—particularly older assets with floating-rate debt. Importantly, this was a financing problem, not a fundamentals problem, especially in multifamily.
4: Debt funds will continue to be a major source of real estate financing. (9/10)
In early 2023, banks began reducing lending activity due to regulatory and balance-sheet pressure, with non-bank lenders filling the gap. Debt funds and private credit vehicles played an outsized role in refinancing and acquisition financing, particularly for transitional assets.
However, capital became more selective as the year progressed. Pricing discipline tightened, leverage moderated, and not all borrowers found the flexibility they expected. The structural shift away from bank-dominated lending was real, though it was less aggressive than some projections implied. As a result, in 2025 there was an uptick in bank lending which was matched by debt funds and private credit.
5: The spread between homeownership and renting will moderate but stay around current levels. (9/10)
Homeownership remained significantly more expensive than renting throughout 2025. Elevated home prices, limited inventory, and mortgage rates well above pre-2020 norms continued to delay first-time buyers and keep renters in place longer.
The return of rent growth, albeit not as robust as expected, narrowed the spread slightly, but the gap remained historically wide. In its 3Q2025 market study, Newmark reported the differential between renting and buying a home was $1,241—a 66% difference. One year prior, the difference was 65.3%. This consistent differential reinforces one of the central demand drivers for multifamily investing.
6: Multifamily sales activity will tick up but stay low relative to the 2021–22 peak. (10/10)
Transaction activity increased in 2025 as price discovery improved and some sellers accepted new valuation realities. Capital that had been raised in anticipation of distress slowly began to deploy.
According to Newmark’s third quarter multifamily report, the sales of multifamily assets increased on both year-over-year and 12-month trailing basis. Third quarter investments in multifamily properties totaled $43.8 billion, a year-over-year increase of 12.6%. Equally telling was 12-month trailing sales activity which totaled $159.9 billion, 22.9% more than the previous period. The Southeast and southwest markets continue to pace overall activity, accounting for 46.7% of total market activity.
By comparison, annual sales activity reached its peak in 2021 and 2022 when transaction volume, according to Statista, totaled $343.9 billion and $294.8 billion, respectively.
7: Construction costs will be impacted by tariffs. (7/10)
Tariffs represented a credible and highly anticipated risk entering 2025, particularly given President Trump’s stated policy priorities. The threat, execution and pull-back of tariffs made headlines throughout the year, but the impact of tariffs on construction pricing remained more theoretical than decisive. In fact, financing costs and local regulatory hurdles played a larger role than tariffs.
Overall construction costs rose roughly in line with historical averages. In some cases, increases in material and overall construction costs, regardless the impact of tariffs, were mitigated by general contractors who reduced bids to secure business during a slower construction cycle.
8: Property insurance will normalize to an inflationary growth rate. (8/10)
After extreme premium increases in 2022 and 2023, insurance markets showed signs of greater stabilization in 2025. According to a report by Marsh, property casualty rates declined 9% in each of the first three quarters of the year and reinsurance capacity improved. However, normalization was uneven. Properties with claims history and markets exposed to hurricanes, wildfires, and other climate risks continued to see outsized increases. This prediction was directionally right, but geography mattered more than anticipated.
9: Affordability will become an increasing issue. (8/10)
Affordability was a dominant economic and political issue in 2025, affecting everything from consumer goods to housing costs.
Over much of the last several years, wage growth has been strong and outpaced rent growth. Under these conditions, the affordability index for renters, measured by the percentage of salary paid for housing, was quite favorable—especially when compared to homebuying where costs remained out of reach. With the belief that wage growth would slow while rent growth increased, we predicted that affordability would become a more significant issue. In reality, wages and rents didn’t change quite as we expected, lessening the impact to the affordability index.
However, this is a structural issue, not a cyclical one—and one that continues to support long-term multifamily demand.
10: The Qualified Opportunity Zone (QOZ) law will be extended. (10/10)
The Opportunity Zone investment framework was extended following bipartisan support. Along with the extension, specific structural elements will change when the new program is launched in January 2027.
For long-term investors, continuity mattered more than form, and that continuity largely materialized.
Final Score and Takeaways
With each prediction worth 10 points, my 2025 accuracy score comes in at 86.5 out of 100, or 86.5%.
That’s below my long-term average, but I’m comfortable saying that, especially when considering the political and economic variables present as 2025 began. Forecasting isn’t about perfection; it’s about building durable frameworks that help investors navigate uncertainty. Predictions that missed tended to do so on timing or magnitude, not on underlying fundamentals.
Multifamily remains a long-term asset class supported by structural demand, constrained supply, and demographic realities. Short-term volatility is inevitable. Clear thinking and accountability are not optional.
As always, we’ll continue to publish our views, test them against reality, and refine our strategy accordingly.
