The long-quiet multifamily lending engine is turning over again. The Mortgage Bankers Association forecasts $827 billion in 2025 CRE originations — a 24% jump — driven by $417 billion in multifamily loans alone. After two years of tight credit and price repricing, lower rates are re-opening financing channels as agency liquidity anchors pricing discipline. For borrowers and lenders alike, clarity is capital.

Investor sentiment has noticeably improved. CBRE’s Q3 survey shows renewed bidding on both core and value-add assets as rate visibility returns. September CRE sales topped $27 billion — the strongest month of 2025 — with apartments the standout segment. Underwriting discipline has not softened, but buyers are re-engaging as pricing floors emerge. As a Dallas lender put it, “Deals aren’t cheap again — they’re just possible again.” On balance, equity capital is willing to accept lower returns for stabilized certainty.

Rents are easing into equilibrium. Effective rents have declined four consecutive months through October as Sunbelt deliveries outpaced absorption. National vacancy rose to 4.4% (from 4.2% a year ago), still below its pre-pandemic average. Rent growth has slowed to low-single digits year-on-year — a normalization after a historic boom. Midwestern and Florida metros remain near full occupancy, suggesting demand has rebalanced rather than receded. In practice, operational stability is replacing rent spikes as the metric that matters.

Apartment values are holding their ground. NCREIF posted +0.06% Q3 appreciation for apartments and +1.44% total return including income — a third straight positive quarter. Cap rates compressed to 5.62% from 5.92%, confirming bid support for quality assets. Institutional owners continue to hold rather than sell at discounts, while buyers are recalibrating target returns to match the Fed’s dovish pivot. Nonetheless, pricing remains tiered: Class A urban stabilized assets see tight spreads; secondary markets price risk in basis points, not narratives.

Falling yields are a lifeline for owners facing the 2026 maturity wall. The 10-year Treasury briefly dipped below 4% after the Fed’s October cut, easing refinance math for thousands of multifamily loans. Roughly $35 billion in apartment debt — about 31% of CRE maturities through 2026 — is rolling forward. Loans with DSCR below 1.2 may still face workouts, but banks report multifamily delinquencies at just 1.4%, down from 1.6% in Q1. Bridge lenders are extending terms rather than foreclosing, reflecting shared confidence that time will heal leverage.

With borrowing costs easing and capital rediscovering risk appetite, multifamily is set to lead CRE’s 2025 recovery cycle. Expect a financing race into Q1 as borrowers lock spreads before further Fed action. Developers will still face construction lender scrutiny, but stabilized assets are well-positioned for refinance and portfolio expansion. If rate cuts continue into 2026, apartment capital markets could normalize faster than rents do — a reversal of the last cycle’s sequence. The constraint shifting forward is not cost of capital but discipline of deployment.