The U.S. national debt reached $36.2 trillion as of January 2025, the highest in the world—more than double that of China, which holds the second-largest debt at approximately $14 trillion. The U.S. now requires over $1 trillion annually in interest payments alone.
This high-debt burden affects long-term economic growth and interest rates. Additionally, reliance on money printing to service debt can drive inflation, while a high debt-to-GDP ratio undermines investor confidence.
Economic and Political Landscape: The Impact of Trump’s Policies
Donald Trump’s primary agenda to “Make America Great Again” includes reducing national debt through tariffs (promoting fair trade), cutting federal expenses, enhancing efficiency, lowering taxes to attract business investment, and tightening immigration policies. While these measures aim to reset the U.S. economy, they come with short-term volatility, reduced consumer confidence, and potential inflation spikes. However, the long-term benefits could include lower national debt, reduced treasury rates, a revitalized manufacturing sector, and improved affordability for Americans.
What Should Investors Do?
“In today’s volatile market, investors should focus on long-term fundamentals and resilient investment opportunities to protect and grow their wealth. At Elim, we prioritize value investing by partnering with sponsors who possess strong local expertise, while actively participating in property management and key decision-making throughout the investment lifecycle,” said Stanley Kung, Managing Director of Elim Investment Management.
Market Insights: The Resilience of U.S. Multifamily Investments
Historically, the U.S. multifamily sector has demonstrated remarkable resilience, even during economic downturns. A new investment cycle is emerging, presenting significant opportunities in the market.
1. Strong Rental Demand Multifamily properties continue to benefit from stable demand, driven by population growth, urbanization, and an increasing affordability gap between renting and homeownership. The average first-time homebuyer age has risen to 38, compared to 31–33 between 1993 and 2022. Studies indicate that more Gen Z and Millennials prefer renting due to its flexibility, lower financial burden, and lifestyle benefits such as travel. With high home prices, persistent supply shortages, and potential tariff-driven construction cost increases, renting will remain the preferred choice for many.
2. Long-Term Growth Opportunities A significant decline in multifamily construction starts—down more than 40% due to high interest rates and rising construction costs—will likely create supply constraints in the coming years. This imbalance presents opportunities for rent growth and capital appreciation through acquisitions and new developments. Moreover, single-family home sales have slowed in recent months as 30-year mortgage rates remain above 6.5%. A sluggish home sales market will further decelerate development and rezoning applications, reinforcing rental market strength.
3. Portfolio and Geographic Diversification A recent Bank of America survey found that over 86% of private investors are prepared to invest in real estate in 2025, with real estate ranking as the top growth opportunity for over 31% of high-net-worth individuals. Investors can mitigate risks by diversifying across geographic locations and property types, enhancing portfolio resilience in uncertain markets.
Partnering for Success
Elim Investment Management collaborates with leading multifamily real estate operators to maximize asset performance. For wealth managers seeking sustainable income and long-term capital appreciation opportunities for their clients, contact Elim Investment today.
