According to the National Multifamily Housing Council (NMHC) October 2024 Quarterly Survey of Apartment Market Conditions, three out of four indices showed positive trends this quarter. The Sales Volume (67), Equity Financing (63), and Debt Financing (77) indices all surpassed the breakeven level of 50.
However, for the ninth consecutive quarter, the Market Tightness Index fell below the breakeven level, indicating looser market conditions. Despite an overall score of 37, there was a significant increase in respondents who believed that market conditions were looser compared to three months ago – with a rise from 27% in July to 40%.
Chris Bruen, NMHC’s economist and senior director of research attributed this trend to a decrease in Treasury yields by 28 basis points over three months due to Federal Reserve’s cut on short-term rates by half. This resulted in more favorable debt financing for third straight quarters and increased availability for equity financing after two-and-a-half years.
Bruen also noted that although there has been an influx of multifamily units being delivered into the market causing looser conditions reported by survey respondents; strong demand has led most new supply getting absorbed successfully.
