Thinking about inflation? You’re not alone. According to Google Trends, searches for the word hit an all-time high in May 2021, returned to average in August and spiked again in December. As long as inflation is on everyone’s minds, we thought it would be helpful to do a deep dive into statistics provided by the Yardi Matrix U.S. Multifamily Outlook 2022.
Will inflation affect multifamily for better or for worse in 2022? Let’s look at the data to find out.
The good news about inflation
To understand how inflation has affected multifamily over the past year, we first need to look at this sector within the context of the overall economy. Since the Great Recession, federal interest rates have stayed near-zero. They rose slightly, starting in 2016, before sliding back to near-zero territory in response to COVID-19. In 2021 alone, inflation rose about 7%, the fastest rate since the 1980s. Between record-low interest rates and rising inflation, there have been concerns of an overheated economy that could cause inflation to get wildly out of control.