📉📈 Macro Volatility, Multifamily Strength: Jay Parsons Shares What's Next

On a recent episode of the Walker Webcast, RealPage Chief Economist Jay Parsons joined Willy Walker for an insightful discussion on multifamily real estate amid today's economic crosswinds. Percy tuned in and distilled the key insights below—so you don't have to.

Here’s what multifamily operators need to know:

The Macro Backdrop: Navigating Uncertainty

Parsons described today’s environment as "defined by uncertainty." Inflation metrics offer mixed signals, looking better once shelter is factored out. Yet the Fed remains cautious. If shelter-driven inflation continues easing, Parsons sees growing support for rate cuts, despite the ongoing policy-market tension.

Eggs, Housing, and the CPI Reality

Walker noted the recent spike in egg prices, clarifying it wasn't due to policy but avian flu eliminating 150 million hens. Parsons drew a parallel: Just like eggs, housing faces real supply-driven shocks. Policy narratives alone won't fix a core issue—we simply aren't building enough homes.

Multifamily ≠ Office: Demand Driven by Lifestyle

Office demand hinges on return-to-work policies. Multifamily demand is different—it's resilient and lifestyle-driven. Parsons highlighted rapid leasing recoveries in cities like New York and robust, ongoing absorption in Sunbelt markets. Simply put, people move to apartments because of lifestyle preferences, not just job proximity.

Construction Starts are Falling Rapidly

While current deliveries remain high, new multifamily construction starts have plummeted, signaling a looming supply crunch. Dallas and Houston may normalize by year-end, but markets like Austin face continued shortfalls. If demand remains steady, multifamily undersupply appears inevitable—a bullish sign for long-term operators.

Absorption Dispels Oversupply Myths

Despite some market fears, the Sunbelt isn't oversupplied. Instead, record-high absorption rates—like Dallas’s 10,000+ units absorbed in Q1 alone—show demand is vibrant. Elevated vacancies are temporary symptoms of widespread lease-ups, not weak demand.

Migration is Normalizing—but Still Strong

Sunbelt migration may have cooled slightly from pandemic highs, but Parsons emphasized it's still well above historical averages. Strong domestic migration and population growth continue fueling markets like Miami, Charlotte, and Phoenix.

Single-Family Affordability Trap Boosts Multifamily

One critical insight: Since 2020, mortgage payments have soared while rents rose moderately. Unless mortgage rates drop significantly or builders flood the market—neither imminent—renters are effectively locked in, bolstering long-term multifamily demand.

Market Fragmentation Debunks Monopoly Claims

Parsons countered popular myths about large landlords dominating the rental market, noting even the largest institutional owners control less than 0.5% of the U.S. apartment stock. The multifamily sector remains deeply fragmented, unlike many industries.

Capital on the Sidelines: A Pressure Cooker

Finally, Parsons and Walker discussed the state of capital markets. Fundraising is down, but pressure to deploy accumulated capital (or return it) is building. As competition for deals intensifies, waiting for lower rates could become the riskiest play.

This post was inspired by insights shared during the Walker Webcast featuring Jay Parsons, Chief Economist at RealPage. Highlights were drawn from his conversation with Willy Walker. For the full episode, visit Walker & Dunlop’s YouTube channel.