According to Freddie Mac’s 2016 Multifamily Outlook report, last year produced the greatest amount of new supply to hit the multifamily sector in a single year since 1989. High demand kept up with the supply of 381,000 new units, which boosted rent prices and kept vacancy rates low. This year, the level of new supply has continued to rise, although it appears to be decreasing from the boom in 2015.

Fitch Ratings reports that construction, particularly in the Class A and student housing sectors, is still escalating. However, these segments may be at risk of overbuilding. According to Fannie Mae, new multifamily developments are disproportionately concentrated in major markets such as New York, Denver, Seattle and Boston. Still, current multifamily occupancy is strong across the board and has remained near historic highs thanks to the flourishing rental market.

A deceleration of month-to-month rent growth suggests the market has passed the peak of its growth spurt. Average monthly rent dropped from $1,220 to $1,219 in September 2016, marking the first such decrease since November 2015. A September report from Yardi Matrix shows that year-over-year rent growth remains solid at 4.7%, which indicates that the slowdown in multifamily rent is an adjustment to more sustainable levels for long-term growth.

Trepp data shows multifamily CMBS issuance in 2016 has dropped significantly from the huge volume originated in 2014 and 2015., though it’s not the only property sector to experience a decrease. Along with low CMBS issuance, LTVs have remained relatively flat. The average multifamily LTV has fluctuated between 66% and 71% since 2014, but looking between the lines shows a slight decrease in LTVs in 2016.

Average loss severity for disposed multifamily loans has hovered around 30% since 2011 and continues to do so in 2016. However, the volume of loans disposed with losses has decreased significantly this year.

View a year-to-year comparison of multifamily delinquencies.

The multifamily sector will continue to experience the “wave of maturities” with an immense amount of CMBS debt coming due over the next 14 months. The steep demand for multifamily housing is expected to last, as the millennial demographic will continue to drive the rental market and keep occupancy levels high.