Freddie Mac’s Multifamily Apartment Investment Market Index trended positive in the second quarter, buoyed by rising net operating incomes and low interest rates.

The index is up 0.7% quarterly and 2.6% annually, while multifamily mortgages rates increased by 5 basis points over the course of the quarter. The uptick is the first quarterly increase since the fourth quarter of 2018, but rates are still down 37 basis points annually.

“This quarter’s AIMI shows a positive environment for multifamily investors in most markets, including those hit hard by the pandemic,” said Steve Guggenmos, vice president of Freddie Mac Multifamily Research & Modeling. “The low-rate environment and strong net operating incomes offset a slight rise in mortgage rates, indicating a healthy market going into the second half of 2021.”

AIMI increased in 22 of the 25 markets tracked by the index over this quarter, with Jacksonville, Minneapolis and Phoenix the only markets not to experience growth. Over the course of the year, AIMI has increased in the nation and in 20 markets. 

NOI growth was “universally positive” both for the US and across individual markets in the quarter, with NOI growing the fastest in Orlando and Phoenix. And property prices grew in the nation and in 24 of the 25 markets, with New York the only metro to post a decline at -1.5%. Over the year, NOI increased in the US and in 17 markets with New York and San Francisco showing double digit NOI declines, a rarity for any market annually, according to Freddie Mac.