The threat of apartment oversupply should be held back by steady absorption rates, a modest drop in starts, employment growth, new household formations, and an overall preference toward rental housing this year. So predicts the Freddie Mac Multifamily Research Group in its new 2017 Multifamily Housing Outlook report, released on Jan. 31.

The government-sponsored enterprise's study covers apartment demand, vacancies, and rent growth nationally as well as in the top metro markets.

On an adjacent note, the company expects vacancy rates to rise above 5% for the first time since 2011, and rents to grow at about the same pace as in 2016, again exceeding the historical average. Gross-income growth, meanwhile, is expected to average 3.4% in the top 70 metro markets.

"Demand for rental units is at a historic high due to demographic changes and lifestyle preferences, but increasing new supply and other factors are likely to moderate multifamily market growth in 2017," said Steve Guggenmos, Freddie Mac Multifamily vice president of research and modeling, in a release. "In particular, landlords are likely to pull back on rent increases as new supply enters the market and vacancy rates rise."

The full report can be found here.