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D.C. Multifamily Performance Defies NEWS

The federal government employment's impact on the multifamily industry

Recent headlines have focused on widespread government layoffs and federal agency cuts in the nation’s capital. Yet, Washington D.C.’s multifamily market tells a different story. This report explores how the sector’s fundamentals remain resilient, defying the broader narrative of economic slowdown in the region.

The report also examines what the economic impact of the federal government’s cuts and layoffs have been to employment in D.C. Cushman & Wakefield has found that the D.C. region added 4,000 jobs through May. While growth has slowed compared to 2022-2024, Washington, D.C., is outperforming other major gateway markets.  

Federal layoffs remain modest so far, and even once the federal employee buyouts go into effect, the effect on unemployment should not be as catastrophic as headlines suggest. Additionally, federal jobs account for only about 11% of the 3.4 million nonfarm jobs in the region. This industry diversity helps buffer the regional economy from federal layoffs. 

Federal agency cuts have led to layoffs among contractors. While this ripple effect is likely to have direct consequences on Washington, D.C.’s office market, the multifamily market has remained resilient. 

Apartment demand in the first quarter was consistent with its relative ranking over the past few years. Early readings of second quarter data suggest demand is tracking similarly, underscoring the market’s enduring appeal. Several factors, beyond a diversified economy, contribute to the strength of Washington, D.C.’s apartment market. Many federal buyouts were taken by older employees who are less likely to rent. Additionally, the significant gap between for-rent and for-sale costs in the region plays a role.  

Forward-looking, demand-side metrics remain positive for the multifamily sector in the D.C region. Read the full report to see the full details on both the economic and employment picture in the region, as well as why Cushman & Wakefield continues to consider the D.C. region a compelling market for multifamily investors.

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