Volatility around tariffs and the financial markets has had a significant impact on apartment market sentiment.
The National Multifamily Housing Council’s (NMHC’s) recent quarterly survey, conducted between March 31 and April 14, saw mixed results, with those responding after the administration’s tariff announcement on April 2 more likely reporting worsening conditions for debt and equity as well as decreasing sales volume from the prior three months.
“We typically describe our Quarterly Survey as a sort of snapshot in time of apartment market sentiment,” said Chris Bruen, NMHC’s economic and senior director of research. “And, in doing so, we assume that any day-to-day changes that occur within the two-week survey period are negligible and not worthy of reporting.”
However, he added: “This month was clearly atypical in the significant volatility we saw in both trade policy and financial markets. The rise in the 10-year Treasury yield, specifically, appeared to negatively affect conditions for debt financing. Despite these disparities, conditions largely showed improvements compared to three months ago.”
Three of the four indices that are part of the Quarterly Survey of Apartment Conditions—market tightness, debt financing, and sales volume—came in above the breakeven level of 50, indicating more favorable conditions. The Equity Financing Index just was shy of the breakeven level.
Findings from the survey, with 141 CEOs and other senior executives of apartment-related firms nationwide responding, include:
- The Debt Financing Index jumped to 65, indicating better conditions than three months ago. According to the NMHC, this correlates with the average decrease in the 10-year Treasury yield—between 4.6% in January and 4.2% in early April.
- The Equity Financing Index was at 49, reflecting less available equity than three months ago. This sentiment varied among the respondents who submitted before or after April 2.
- The Sales Volume Index came in at 60, indicating increased deal flow after the prior quarter’s reading of 41. Almost half of the respondents, 49%, said they thought market conditions were unchanged compared with three months ago, while just over one-third reported higher sales volume. The remaining 14% reported lower sales volume.
- The Market Tightness Index was 52—above the breakeven level for the first time since July 2022, indicating tighter market conditions. NMHC noted this appeared to be the only index value that was not impacted by market volatility since it takes longer to observe changes in supply and demand for physical apartment space.
