Apartment executives responding to the National Multifamily Housing Council’s (NMHC) quarterly survey of apartment market conditions were less optimistic after the announcement of tariffs on April 2nd than they were in the days before. Those who responded to the survey after April 2 were more likely to report worsening conditions for debt and equity financing as well as decreasing sales volume over the preceding three months, said NMHC.
“We typically describe our Quarterly Survey as a sort of snapshot in time of apartment market sentiment, and, in doing so, we assume that any day-to-day changes that occur within the two-week survey period are negligible and not worthy of reporting,” noted NMHC economist and senior director of research, Chris Bruen. “This month was clearly atypical in the significant volatility we saw in both trade policy and financial markets.”
The survey was conducted between March 31 and April 14.
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The rise in the 10-year Treasury yield, specifically, appeared to negatively affect conditions for debt financing, said Bruen. Despite these disparities, conditions largely showed improvements compared to three months ago, he said.
Coming in at 65 this quarter, the debt financing index indicates better conditions for debt financing compared with three months ago. This corresponds with an average decrease in the 10-year Treasury yield between January and early April from 4.6% to 4.2%.
The equity financing index came in at 49 for the quarter, which reflects less available equity financing over the past three months. Sentiment varied depending on when respondents submitted their responses, said NMHC.
After settling at 41 during last quarter’s reading, the sales volume index came in at 60, which indicates increasing deal flow over the past three months. Forty-nine percent of respondents thought sales volumes were unchanged over the quarter, while 24% thought sales volume was higher than in January, up from 16%, the survey found. Fourteen percent of respondents, down from 34%, thought sales volume was lower for the quarter.
NMHC’s market tightness index was 52 for the quarter, the first time it has been over the breakeven level of 50 since July 2022. The firm noted this index was not meaningfully affected by market volatility in early April and said changes in the supply and demand for physical apartment space take longer to play out.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
