Apartment Conditions Remain Fertile for Growth
The only index indicating weaker conditions was debt financing.
Apartment market conditions are continuing their year-long journey in improvement, according to the National Multifamily Housing Council’s quarterly survey of apartment market conditions
“We are continuing to see strong, broad-based demand for apartments as the US economy remains on an upward trajectory,” noted NMHC’s Vice President of Research, Caitlin Sugrue Walter. “Sunbelt markets in particular are witnessing historic levels of occupancy and rent growth, while most urban, coastal markets have returned to or even surpassed pre-pandemic levels.”
In October, NMHC’s Market Tightness (82), Sales Volume (79), and Equity Financing (65) indexes came in above the breakeven level (50) for the third quarter in a row.
The only index below breakeven, Debt Financing (48) indicated weaker conditions, though the majority of respondents indicated conditions to be unchanged from the previous quarter. NMHC says.
While overall, the multifamily housing market is showing strength, The Market Tightness Index dipped to 82 from 96 as market conditions have been seen as tighter.
For sales, 61% of respondents reported higher sales than three months prior, while 32 percent say their volume was unchanged.
For the quarter, 33% of the industry professionals said equity financing was more available than in the three months prior, with 52 % asserting equity financing conditions were unchanged from the previous quarter.
With the decline in the Debt Financing Index to 48 from 71 in the quarter before, 21% of professionals felt that financing conditions were worse against the 17% reporting better conditions.
The survey was conducted October 18-25 with105 CEOs and other senior executives of apartment-related firms nation-wide responding.
Previous surveys by NMHC track the apartment sector’s growing robustness through this year.
NMHC’s immediate past survey released in July found 92% of the executives reported apartments with low vacancy rates and high rent increases were prevalent compared to 67% in April.
In January, the quarterly report found the indexes for sales volume and equity financing both improved beyond the breakeven point, but market tightness and debt financing continued to show weakness.