Freddie Mac: Third Consecutive Quarter of Multifamily Growth

Multifamily investing fundamentals grew stronger in the third quarter, reported Freddie Mac, McLean, Va. 

Freddie Mac Multifamily Vice President of Research and Modeling Steve Guggenmos said the enterprise’s Apartment Investment Market Index’s third-quarter increase marked the third consecutive quarterly increase in the index, “but it is down slightly year-over-year.”

“The index has been in a consistent range since 2013,” Guggenmos said. He noted the index has indicated a “favorable investment environment for apartments since 2009.”

Freddie Mac’s AIMI combines multifamily rental income growth, property price growth and mortgage rates to provide one index that measures multifamily market investment conditions. A higher index reading from one quarter to the next implies an increasingly favorable environment for multifamily investment opportunities, while a decline suggests that attractive investment opportunities are becoming more difficult to find.

Nationally, AIMI values increased in the third quarter to 110.9 from 110.4 in the second quarter. Looking beyond at individual metros, Guggenmos said AIMI values fell in five of 13 metros tracked over the last quarter and fell in 10 metros during the past year. 

The only three markets where AIMI increased relative to one year ago were Washington, D.C., (12.7 percent), Atlanta (2.4 percent) and Dallas (0.9 percent).