MARCH 25, 2025

Sales in the multifamily home market rose by 7.9% compared to February 2024, though pending sales also fell by 6.8%. Multifamily homes continue to be among the priciest on the market, with the midpoint of all sales landing at $559,950, a 7.7% increase from the prior year.

“The upside to owning a multifamily has always been the great potential to obtain passive rental income and the ability to gain generational wealth.  More importantly, in today’s housing crisis, multifamilies are also a very desirable option for multigenerational families or an owner-occupied buyer looking to reduce monthly costs through rental income.  However, with a very limited supply of existing stock, climbing sale prices and costly regulatory mandates for landlords of rentals units here in Rhode Island, the benefits of owing a multifamily home are quickly eroding.” said Chris Whitten, president of the Rhode Island Association of Realtors.

Multifamily home sales stayed relatively stable last month, with sales falling just 1% from the previous January. The median sales price rose 15.8% to $550,000 and the number of listings increased 16.7% year over year, leaving a 1.7-month supply of multifamily homes on the market.

“Housing development in Rhode Island has remained stagnant for far too long. Most states have regained some balance between supply and demand, but we’ve made little to no headway here in Rhode Island due to new construction hurdles and loads of red tape. But I truly believe by working together at the local and state levels we can right this ship,” said Rhode Island Association of Realtors 2025 President Chris Whitten.

Sales held relatively steady in the multifamily home market, rising just 1.5% from the prior year and number of pending sales under contract saw no change from 12 months earlier. The median price of $545,000 however, represented a 13.5% hike.

“Many keep asking why we’re not feeling a slight market cooling like most of the rest of the country. The two biggest factors include our severe drought of new construction units paired with those from out-of-state,  particularly Massachusetts, looking at Rhode Island as a more affordable  option. Many housing market experts have their eyes on RI as one of the  nation’s hottest housing markets here in 2025,” Whitten said. 

A slowdown in sales activity is also evident in the multifamily home market.  Last month, sales decreased by 13.8%, and pending sales dropped by 2.5%  from November 2023. The median price of those sales rose to $563,500  compared to $492,000 last year. 

“As we move into the New Year, we expect to see more activity in the housing market. Since the beginning of 2022, the 'lock-in effect’ has most homeowners hanging onto their low interest rates causing stalled sales and lessened inventory. Therefore, life changes that typically precipitate a move like divorce, babies and job relocation have been put  on hold.  But we anticipate with the equity gains homeowners have made  along with many getting used to the 'new normal' in mortgage rates, that inventory will continue to grow as the new year progresses.” said  Whitten.

Sales of multifamily homes also made significant gains. The median price of sales rose from $482,500 in October 2023 to $560,000 last month and closed sales increased by 17.2%. According to the National Association of  Realtors’ 2024 Profile of Home Buyers and Sellers, 17% of home buyers purchased a multigenerational home from June 2023 to June 2024, the highest share ever recorded. Cost savings and the inability of young adults to access affordable housing on their own fueled the demand. The  same report cited that first-time buyers are 38 years old, the oldest on  record and have an income of $97,000, $26,000 more than just two years  ago.

“We’re seeing homeowners who are tapping into their equity  and 401K and competing for properties with first-time home buyers  without those luxuries. Many are cash buyers who are downsizing or  buying a second home. It’s tough for younger buyers to compete with  that. Down payment assistance programs help slightly but lack of  inventory, higher prices and interest rates are still the biggest pain  points preventing our younger generations from starting to build equity  through home ownership,” said Whitten. 

The multifamily home sector slowed considerably from July through September, following a robust second quarter. The third quarter saw no change in sales activity from  Q3 2023, though median price continued to climb, rising 15.7% to  $561,000. 

“It’s important to remember that local markets and sales trends can vary significantly from nationwide or even statewide movements. A successful sale in today’s housing market requires that sellers rely on a Realtor to let them know what is happening in the town and neighborhood their property is in. A professional that knows their market will guide them on how to position their real estate to maximize their return. An over-priced home that sits too long can ultimately lower the sale price,” said Hersey. 

The median sales price of multifamily homes skyrocketed to a record $595,000, 24.6% higher than that of September 2023. Closed sales fell by 12.6% from the previous year, though pending sales showed improvement in activity with an increase of four percent. The number of multifamily homes on the market rose 7.4% from September 2023.

“We haven’t yet seen much of an effect from the Federal Reserve’s September rate cut on Rhode Island’s housing market. Our main problem continues to be supply. The Realtor Association is committed to supporting all viable legislative initiatives that can help in that regard in the 2025 legislative session,” said Hersey.

At $549,000, the median price of Multifamily homes saw an annual increase of 15.6%. Though sales saw a 3.1% gain since August 2023, the rate of increase in sales activity in the multifamily home market has slowed considerably in recent months.

“R.I. saw slight improvement in housing supply in August, but a significant housing shortage remains. The recent reduction of 50 basis points in the funds rate by the Federal Reserve will give builders access to more affordable  credit terms and the housing legislation passed this year should  eliminate some of the roadblocks that hindered development. Building  more homes is the most significant factor in getting our housing market  back in balance,” said Sally Hersey, president of the Rhode Island  Association of Realtors. 

Due to the tight supply of starter homes in the single-family home sector, sales of condominiums increased 44.6%  over last year. At $395,000, the median price of those sales came in  $100,000 less than that of single-family homes. A slight rise in pending sales indicates that closing activity should remain elevated in the weeks ahead.

In contrast, the median price of multifamily homes remained the highest of all three sectors at $550,000. Sales, which have not fallen since January, continued their ascent rising 10.9% more than  July 2023. Barraged by investors, this sector of the market has boomed during the housing crisis, sparked by high rental demand and corresponding income. Incomplete sales expected to close this month,  however, fell 11%, an indication that sales will likely slow in the weeks ahead.

“Overall, there are promising signs for our housing market. More inventory and lower interest rates should help to get the market moving. We’re hopeful that 2024’s housing market will be ending on an upswing,” said Hersey. 

 Multifamily homes continued to be a hot commodity last month, staying on the market only  21 days before going under contract, a 16.7% decline from June 2023. The  sector was the only housing type to experience increased year-over-year  sales in June with a 17.9% increase. Pending sales however, dropped  4.2% foretelling a slight decline in closing activity in the weeks  ahead.   

Today, the Rhode Island Association of Realtors reported that the median price of residential property sales in Rhode Island soared to new heights in May, with multifamily home sales leading the pack.  Multifamily homes with up to four units saw a 23.9% increase from the median price of $440,000 realized just 12 months earlier. The median price of multifamily homes has increased 78.7% in the past four years,  hitting a new record of $545,000 last month.

Largely driven by the well-financed investor market, the allure of solid rental income has pushed significant year-over-year increases in the median price of multifamily homes since 2020. The hike in prices has not deterred sales,  however. Closed sales were up 25.2% from May 2023. The fevered sales volume is expected to continue as pending sales, an indicator of sales activity in the weeks ahead, rose 9.1% from May 2023.

“Real estate has always been a good long-term investment, and that’s never been more true than in the multifamily home market right now. Unlike stocks, a small initial investment – or down payment – enables you to make significant gains on the full value of your investment. And, with today’s strong demand for rentals which shows no signs of subsiding, a steady income is readily available,” said Sally Hersey, President of the  Rhode Island Association of Realtors. 

Multifamily home sales saw the largest annual increase in the median sales price last month, rising 16.7% to $525,000. Closing activity rose 12.9% and the number of listings increased by 10.2%. Often attracting investors and cash and financially fit buyers, the multifamily market is rife with competition.

All residential property types continue to suffer a critical shortage of supply with multifamily homes having the least availability and the condominium market providing the most options, though still limited.

Multifamily home sales followed suit, though more significantly, with March sales falling 19% from one year earlier and the median price rising by 18.9% to $535,000. Pending sales however,  rose 5.6% as multifamily homes remain attractive due to their ability to mitigate mortgage payments with rental income for owner-occupied properties and generate strong rental income for investors. 

The popularity of rental investments and multigenerational housing led to a  7% increase in sales and a 15.6% hike in median price among multifamily home sales. Though the supply of properties in the category is higher than that of single-family homes and condominiums, competition remains fierce as the pool of investor buyers are often well-financed. The median price of multifamily homes in February was $520,000.

“Seeing more buyers able to secure housing is fantastic but the critical issue  remains – we desperately need more housing stock. The Rhode Island  Association of Realtors is committed to working with our state’s leaders and housing advocates to increase supply. We encourage all Rhode  Islanders to reach out to their senators and representatives to support legislation that reduces barriers to development,” said Hersey.

The multifamily home market once again marked the highest median price,  and though the ability to offset the higher costs with rental income is enticing to many, competition in the investor-laden multifamily home market can be difficult for those without cash or excellent financing options. At $480,000, last month the median price of multifamily home sales rose 11.7% from 12 months earlier. Sales activity also rose by eight percent, bucking the trend seen in the single-family home and condominium sectors. Pending sales however, dropped 19.5% from the  previous year indicating a lull in activity in that market in the first  months of the New Year.