NMHC Sees Mixed Results in Latest Apartment Market Survey

The latest edition of the National Multifamily Housing Council’s (NMHC’s) Quarterly Survey of Apartment Market Conditions showed mixed results, NMHC said Monday. Although the Debt Financing (63) and Sales Volume (57) indexes indicated more favorable conditions this quarter, Equity Financing (49) and Market Tightness (47) came in below the breakeven level of 50.

NMHC reported that deal flow and opportunities to transact are showing signs of a rebound, even as equity financing continues to be less available than quarters prior, and a tight monetary policy environment persists, Although a plurality of Quarterly Survey respondents (45%) thought opportunities for apartment transaction were about the same as three months ago, 28% believed more properties would fit their transaction criteria compared to three months ago. Conversely, 19% believed fewer properties now on the market would fit their transaction criteria.

“Concessions have become commonplace in markets with elevated levels of deliveries, as survey respondents reported overall looser market conditions for the eighth consecutive quarter,” said Chris Bruen, NMHC economist and senior director of research. “Yet, this has not been for a lack of demand, which is helping to absorb this new supply at a healthy pace.”

Bruen added that the 10-Year Treasury yield fell 25 basis points over the past three months as inflation edged closer to the Federal Reserve’s 2% target and the labor market began showing signs of cooling. “This has led to more favorable conditions for debt financing and a second straight quarter of increasing sales volume, even while a plurality of respondents report unchanged conditions.”

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