WASHINGTON, D.C. - Apartment markets appeared mixed in the April 2016 National Multifamily Housing Council (NMHC) Quarterly Survey of Apartment Market Conditions, with two of four indexes landing below the breakeven level of 50. The Market Tightness (43) and Equity Financing (45) indexes showed declining conditions for the second quarter in a row, while Sales Volume (53) and Debt Financing (50) indicated improving and steady conditions, respectively.
“We continue to see some softening in the market relative to one of the strongest runs in recent memory for the apartment industry,” said Mark Obrinsky, NMHC’s Senior Vice President of Research and Chief Economist. “As new apartment construction catches up with demand, we expect to see moderation from record rent growth as well as more selectivity from equity and debt financing sources.”
Consumer demand for apartments declined in the Market Tightness Index, dropping four points to 43. After seven quarters reporting tighter conditions, this marks the second quarter indicating a looser market.
Property sales volume increased from last quarter, with the Sales Volume Index rising seven points to 53. Just over a quarter (26 percent) reported higher sales than three months ago, compared with 21 percent who indicated lower sales.
The Equity Financing Index edged down slightly from 46 to 45 - the second quarter in a row below 50. Conversely, the Debt Financing Index climbed 13 points to the breakeven level of 50.
The Quarterly Survey special questions asked about bank construction financing. Among those seeking financing, two-thirds reported less availability compared to six months ago, with a quarter (26 percent) who indicated it was significantly less available. Just two percent said it was more available. [Note: data excludes 29 percent who reported don’t know/not applicable.]
In addition, the survey asked about financing terms. Six in ten reported slightly less favorable terms than six month ago, and 12 percent reported significantly less favorable terms. One if five said terms were unchanged. [Note: data excludes 46 percent who reported don’t know/not applicable.]
About the Survey:
The April 2016 Quarterly Survey of Apartment Market Conditions was conducted April 11 to April 18, 2016; 120 CEOs and other senior executives of apartment-related firms nationwide responded.
View the full data online at www.nmhc.org/Research-Insight/NMHC-Quarterly-Survey-of-Apartment-Conditions-April-2016