Investors Stay Selective as Multifamily Cap Rates Edge Higher
Investors are seeing opportunities in multifamily markets with durable job growth and limited new deliveries, but they remain highly selective about where they choose to invest, according to Crexi’s August 2025 report.
Median cap rates for multifamily properties sold rose slightly to 6.36% while asking cap rates slipped to 7.19%. The spread between the two indicated ongoing price discovery and selective bidding for quality “even as multifamily proves to be a less risky investment than other asset classes amid a national housing shortage,” Crexi said.
The median price for multifamily property sold rose to $210.28 per square foot -- up 3.55% month-over-month and 1.2% year-over-year. That was about 20.48% more than the median asking price of $174.53 per square foot. Crexi said this discrepancy was likely due to differences in the mix of assets for sale, “with traded properties skewing more toward stabilized or growing, well-located communities.”
However, multifamily properties took longer to sell than the previous year. In August 2025 they remained on the market for an average of 152 days, compared to 146 days in August 2024, suggesting increased caution on the part of buyers Nevertheless, “overall sales velocity remains healthier than in the office or industrial sectors,” the report commented.
Crexi said the data showed that national rent growth is stabilizing at low single digits with modest monthly increases likely. Some coastal markets were overperforming, including San Francisco, where median rents surged, driven by limited vacancy and more people going back to work in offices. In addition, apartment rental demand was being driven by people unable to buy homes.
The data also showed uneven regional performance as the excess supply of apartments worked through the system. “Investor activity remains selective but improving in markets with durable job growth and limited new deliveries. If the Fed transitions toward rate cuts later this year, cap-rate pressure could ease and facilitate more multifamily transactions,” the report predicted.
Source: GlobeSt/ALM