In some markets, multifamily housing may start to stabilize later this year after vacancies peak, but recovery prospects remain murky for the states hit hardest by the residential real estate downturn, Fitch Inc. said Thursday.
The rating agency said it expects multifamily vacancies to peak at 8.9% sometime this year and delinquencies to climb to nearly 13% "in the near future," as recovery prospects will be muted in states such as Nevada, Tennessee, Florida and Texas, which were hit especially hard during the downturn.
Delinquencies in all four states for multifamily mortgages are at least 11%.
"Rents will take longer to recover as landlords continue to offer significant concessions to maintain occupancy," said Mary MacNeill, managing director at Fitch. "Also, high unemployment and declining immigration have substantially reduced household formation and demand for apartments."
Recovery prospects are better for New Jersey, Pennsylvania, Washington, D.C., and Washington state, Fitch said.