Different aspects of the apartment market are giving mixed signals in the April 2016 National Multifamily Housing Council (NMHC) Quarterly Survey of Apartment Market Conditions.
Two of the four indexes fell below the break-even threshold of 50: The Market Tightness Index hit 43, while the Equity Financing Index dipped to 45, each declining for the second quarter in a row. On the plus side, the Sales Volume Index improved to 53, while the Debt Financing metric kept its head above water at 50, holding steady conditions.
“Apartment markets remain strong, but the surge of new apartment construction is starting to shift the supply-demand balance, particularly in the market for upscale apartments,” said Mark Obrinsky, NMHC’s Senior Vice President of Research and Chief Economist. “Given that most new supply is class A, we’re not seeing the same shift in class B and C apartments. In addition, some weakness in the Market Tightness Index may be just seasonality.”