For the third consecutive quarter, multifamily investing fundamentals grew stronger in the third quarter, according to the Freddie Mac Multifamily Apartment Investment Market Index (AMLI), both nationally and in each of the 13 metro markets it tracks.
Nationally, AIMI values increased just 0.4% in the third quarter to 110.9 from 110.4 in the second quarter, while Washington D.C. (7.3%), Orlando (4.4%), and Atlanta (3%) had the biggest quarterly gains among local markets.
According to Freddie Mac, a rise in AIMI 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.
“The AIMI index has been indicating a favorable investment environment for apartments since 2009,” said Steve Guggenmos, vice president of Freddie Mac Multifamily Research and Modeling, in a statement. “A move up in the index in the third quarter 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.”
In the third quarter of 2015, the index stood at 113.55 and then dipped to 107.32 in the fourth quarter before starting its recent climb.
AIMI values fell in five of 13 metros over the last quarter and in 10 metros during the past year. The only three markets where AIMI increased relative to this time last year were Washington D.C., (12.7%), Atlanta (2.4%), and Dallas (0.9%).
AMLI combines multifamily rental income growth, property price growth, and mortgage rates to provide a single index that objectively measures multifamily market investment conditions.