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Multifamily market conditions continue to weaken amid financing challenges, according to the National Multifamily Housing Council’s quarterly survey for April.

Three of the four indices that are part of the Quarterly Survey of Apartment Conditions—market tightness, debt financing, and equity financing—remained below the break-even level of 50, while the Sales Volume Index moved into positive territory after seven consecutive quarters of decreases.

“Inflation has come in hotter than expected over the past few months—as the shelter component of CPI continues to lag moderating asking rents—which is expected to push back Fed rate cuts,” says Chris Bruen, NMHC senior director of research. “This has translated to a 40-basis-point increase in the 10-year Treasury yield and a decrease in the availability of debt financing over the past three months.”

Findings from the survey, which was conducted between April 1 and 15 with 133 CEOs and other senior executives of apartment-related firms nationwide, include:

  • The Market Tightness Index came in at 41, indicating looser market conditions for the seventh consecutive quarter. Over one-third of the survey respondents, 37%, reported that market conditions were looser than three months ago, while 42% found conditions to be unchanged. The remaining 20% reported tighter market conditions, up from 5% in January.
  • The Sales Volume Index was 52, with the majority of respondents, 61%, reporting sales volume to be unchanged from January. Twenty-one percent reported that deal volume was higher, while 17% thought it was lower than three months ago.
  • The Equity Financing Index at 49 indicated that equity financing was less available for the ninth consecutive quarter. Up from half of the respondents in January, 59% believed availability to be unchanged from three months ago, while 18% reported equity financing to be less available and 17% noted more availability.
  • The Debt Financing index came in at 44, down from a reading of 66 in January. The majority of respondents, 59%, cited unchanged conditions. Twenty-four percent said now is a worse time to borrow than three months ago; 13% cited improved conditions, down from 45% in January.