In the Thick of It: Multifamily's Path Through 2025's Challenges
Rental demand is locked in. So is the cost pressure. Economic futurist Andrew Busch and SmartRent Chief Revenue Officer Natalie Cariola on interest rates, renter migration, and where multifamily technology spending actually pays off.
Speakers
Natalie Cariola
Chief Revenue Officer, SmartRent
Andrew Busch
Economic Futurist; Former Chief Market Intelligence Officer, U.S. Government
What this session covers
Andrew Busch is an economic futurist and a former Chief Market Intelligence Officer for the U.S. government, and he advises C-suite executives on policy, economics, and artificial intelligence. In this session he walks multifamily owners and operators through the macroeconomic picture for 2025, and Natalie Cariola connects it to the operating decisions in front of them.
The gap Busch cited between the roughly $124,000 in annual income needed to buy an average U.S. home and the roughly $79,000 the average U.S. household earned.
Housing units a year the United States has underbuilt since 2008, which limits how quickly new supply can relieve pressure on rents.
People who moved to Texas between 2020 and 2024, while California lost roughly 500,000 residents. Migration continues toward the Sunbelt and the Carolinas.
Figures cited by Andrew Busch on March 20, 2025, drawing on Federal Reserve projections and U.S. Census migration data.
Five things multifamily operators will take from this session
Why higher interest rates keep renters renting
The 30-year average yield on the 10-year Treasury is 4.5 percent, and the yield sat near 4.3 percent in March 2025. Busch argues that rates stay higher for longer, mortgage costs don't return to their pandemic lows, and the buyers priced out of ownership stay in the rental pool.
Where operating margin comes from when you can't raise rent
Busch uses an alligator-mouth analogy: profit widens when revenue rises and expenses fall at the same time. With insurance, labor, and material costs climbing, and new supply landing in growth markets, the expense side is where operators have room to move.
Where residents are moving, and what that does to your supply picture
Sunbelt and Carolina markets continue to absorb migration from California, Illinois, and New York because land, construction, and living costs are lower. That's also where competing supply is being delivered.
What AI actually means for property operations
Busch separates business intelligence from machine learning and sensors, and both from generative AI. He describes generative AI as a capable intern whose work still needs checking, and gives a practical example: prompting a language model to read a competitor's recent earnings calls and summarize its stated growth priorities.
What operators say is actually blocking adoption
In a live poll during the session, not one attending operator said they were holding off on technology investment. The blocker they named most often was internal expertise and staff buy-in, ahead of both return on investment concerns and budget.
Questions this page answers
Do these numbers still hold in 2026?
- Rates went up, not down. The 10-year Treasury yield is near 4.65 percent as of August 2026, against roughly 4.3 percent at the time of the session. The federal funds rate has held at 3.50 to 3.75 percent since late 2025, and market pricing has shifted from expected cuts toward possible hikes. The higher-for-longer call held.
- The affordability gap narrowed. Redfin reported in June 2026 that a household needs $109,796 to afford a typical U.S. home against a median household income of $87,599, a gap of $22,197. Affordability is still stretched: the typical buyer would spend 37.6 percent of income on a median-priced home.
- Growth held up better than forecast. The Federal Reserve projections cited in March 2025 had GDP growth coming down to 1.7 percent. Current projections have GDP growing 2.4 percent in 2026, with unemployment at 4.4 percent, which matches the session's expectation.
Will interest rates come down for multifamily borrowers?
In this session Busch argued rates would stay higher for longer, noting that the 30-year average yield on the 10-year Treasury is 4.5 percent, against roughly 4.3 percent at the time. His point was that borrowing costs should be planned around that level rather than around a return to pandemic-era mortgage rates.
Rates have since moved higher rather than lower. As of August 2026 the 10-year Treasury yield is near 4.65 percent.
Session March 2025 · Updated August 2026Why is rental demand holding up?
Households priced out of buying stay in the rental pool. In March 2025 Busch cited roughly $124,000 in income needed to buy an average U.S. home against average income near $79,000, a gap of about $45,000. The United States has also underbuilt housing by roughly 500,000 units a year since 2008, which limits supply relief.
That gap has narrowed since. Redfin put it at $22,197 in June 2026, down from $26,125 a year earlier. Affordability remains stretched: only 34.2 percent of listings are affordable to the average household.
Session March 2025 · Updated August 2026Where are renters moving in the United States?
U.S. Census data covering 2020 to 2024, cited in this session, shows 2.1 million people moved to Texas while California lost roughly 500,000 residents, with net losses also in Illinois and New York. Migration continues toward the Sunbelt and the Carolinas, driven by lower land, construction, and living costs.
U.S. Census data, 2020 to 2024Are multifamily operators still investing in technology?
In a live poll of operators attending this session, not one chose the option for holding off on new technology investments. 54 percent said they would invest only where cost savings or revenue sharing were clear, 23 percent were increasing investment and expanding budget, and 23 percent would invest only where technology replaced an existing expense or had proven return on investment.
Live attendee poll, March 20, 2025What is the biggest barrier to adopting AI in multifamily operations?
Not budget. In the same live poll, 37 percent of attending operators named a lack of internal expertise or staff buy-in as the biggest barrier. 26 percent cited concerns about maintaining a human touch in resident engagement, 26 percent cited uncertainty about return on investment, and 11 percent were already implementing AI but facing adoption challenges.
Live attendee poll, March 20, 2025See what the return looks like on your portfolio
Walk through where the operating costs are, what technology would change, and what the payback looks like at your unit count.
A customized demo covers:
- Where your operating costs are highest
- What payback looks like at your unit count
- What integrates with the systems you already run
- What rollout looks like for your onsite teams
- The products relevant to your portfolio