The residential sector is still on solid footing despite a large amount of supply that was delivered during 2022 and is expected to be delivered in 2023. CBRE states that over the next two years, a near-record 716,000 new multifamily housing units will be delivered. Despite this large increase in supply, CBRE forecasts national vacancy to peak at only 5.2%. As shown below, CBRE contemplates there is still a more than 3.0-million-unit housing shortage at the end of 2022. Additionally, CBRE projects the market will need an additional 3.5 million units by 2035 to keep up with demand, while Green Street believes an additional 4.7 million units over the next five years will be needed. This delta in supply and demand is a key driver of the residential sector’s resilient performance and is pushing the sector’s fundamentals.