Freddie: Apartment Market Remains Strong

Freddie Mac indexes its apartment markets survey to the first quarter of 2000.

MCLEAN, VA—Multifamily investment fundamentals remain strong both nationally and in most of the 13 major metro areas tracked by Freddie Mac in its quarterly Apartment Investment Market Index, although there are signs of moderation. Reflecting data for the first quarter, the latest AIMI shows the index up slightly—0.30%—to 107.4 from 107 in Q4 of 2015. However, Freddie says that on a year-over-year basis, AIMI continues to trend down, both nationally and in 12 out of the 13 metro areas it tracks, as property value growth exceeds NOI growth in a flat interest rate environment.

“The stability in national AIMI values underscores the essential strength of the multifamily market for potential investors,” says Steve Guggenmos, VP of Freddie Mac Multifamily research and modeling. “Property price and NOI growth continue to outperform their historical averages in the majority of metros.” He adds that despite relatively high multifamily construction, “the overall strength in the labor market and underlying demographic trends are creating robust demand for new multifamily units.”