There are encouraging indications that prospects for multifamily deals are looking up, according to the National Multifamily Housing Council's survey of market conditions.

Indexes of sales volumes, equity financing and debt financing all reached their highest levels since April 2022. However, the market tightness index slipped 10 points from 47 in July 2024 to 37 in October, suggesting looser market conditions for the ninth consecutive quarter, especially in the South and Sun Belt, which are experiencing a flood of new construction. Using a baseline of 50, an index above shows an improved outlook, a score below reflects a weaker one, and a score that's the same means conditions have not changed.

The improved outlook for multifamily debt and equity financing was helped by the Fed's 50 basis point interest rate cut in September. "Survey respondents, in turn, reported more favorable conditions for debt financing for the third straight quarter and more available equity financing for the first time in two and a half years," noted NMHC's chief economist Chris Bruen.