CHC continues to see opportunity across residential sectors as new supply decelerates and demand remains resilient. Housing affordability challenges continue to support rental demand, while declining multifamily construction starts, limited manufactured housing supply and slow student housing deliveries are expected to create a more favorable supply-demand balance over time. Homeownership remains out of reach for many households, with the qualifying income required to purchase a median-priced home approximately 43% above actual median household income, supporting demand for well-located rental housing.
Multifamily fundamentals are beginning to stabilize as new supply decelerates. Deliveries declined to 493,500 units during the 12 months ending in the first quarter of 2026, while absorption increased to 412,364 units. Construction starts have fallen sharply to 322,000 units, and deliveries are expected to decline to less than 350,000 units over the next year. Although occupancy remains below its long-term average and rent growth is modest, CHC believes lower future deliveries should support improving occupancy and rents as excess supply is absorbed. Performance is expected to vary significantly by market, favoring cities with limited new supply and stable tenant demand. We continue to see significant dispersion across markets, as some cities remain oversupplied while others are positioned for a faster recovery due to limited new supply and stable tenant demand.
Manufactured housing continues to benefit from persistent supply constraints and the need for affordable housing. Annual supply growth has remained below 0.1% of inventory over the last decade, while occupancy reached 94.9% in 2025 and pad rents grew 6.0%. The sector remains highly fragmented, with institutional owners representing a small share of investable communities, creating opportunities for active asset management and value creation.
Student housing remains highly dispersed, with enrollment growth increasingly concentrated among primary state universities in the South and West. Fall 2026 preleasing reached 78%, above the market’s decade average, while new supply is expected to decline materially through 2029. CHC favors properties serving primary state universities with strong enrollment trends and limited competing supply.
[YK1]I reworded this paragraph as I didn’t want to imply housing affordability as the primary reason to be constructive for resi/multifamily. Decelerating supply and resilient demand is likely the main reason.
