Apartment market conditions largely have remained the same compared with three months ago, according to the National Multifamily Housing Council’s (NMHC’s) quarterly survey.
Conducted between July 2 and July 16, the survey found a majority of respondents for each of the four NMHC indexes reporting unchanged conditions compared with April. However, the market tightness, sales volume, and debt financing indexes all came in above the breakeven level of 50, while equity financing remained just below that level.
“Rent growth remains low in the South and West amid a historic overhang of new supply, even though strong demand has kept absorptions high and occupancy stable,” said Chris Bruen, NMHC’s chief economist and senior director of research. “Meanwhile, tighter apartment conditions persist in the more supply-constrained Northeast and Midwest.”
• The Debt Financing Index recorded a reading of 69, which signals better conditions from three months ago. While 54% of respondents reported unchanged conditions, 41% reported July being a better time to borrow than three months ago. This is down from 45% in April. Only 2% said they think now is a worse time to borrow.
• The Equity Financing Index dropped one point from April to 48, reflecting less available equity financing. Half of the respondents found equity conditions unchanged from April, while 24% reported equity being less available and 20% more available.
• The Market Tightness Index at 54 indicates tighter market conditions. Over half of the respondents, 54%, cited unchanged conditions from three months ago, while 27% reported tighter market conditions. The remaining 18% cited looser market conditions.
• The Sales Volume Index at 55 signals increasing deal flow, continuing the trend from April’s reading of 60. Down from 34% in April, 22% thought sales volume was higher and 12% reported lower sales volume. However, the majority, 62%, found deal flow unchanged.
“While high levels of political and economic uncertainty have kept some equity capital on the sidelines, survey respondents did report an uptick in transaction volume for the second consecutive quarter,” Bruen added.
