Consumer demand for rental apartments remained strong while the market for apartment properties stayed relatively unchanged in the latest National Multifamily Housing Council (NMHC) Quarterly Survey of Apartment Market Conditions.
The market tightness, sales volume and equity finance indexes all remained near or above the break-even level of 50, according to NMHC. However, its debt financing index declined significantly to 35 from 60. The index fell below 50 for the first time since January 2014.
“The decline in the debt financing index is significant,” said Mark Obrinsky, NMHC’s senior vice president of research and chief economist. “In large part it reflects two things: the modest rise in interest rates, and tightening initiated by Freddie Mac and Fannie Mae as they began to approach their lending volume caps. Regulator action to keep multifamily mortgage finance flowing has averted a crisis, but lending conditions remain somewhat tighter.”
That finding is supported by the Federal Reserve Bank’s latest Senior Loan Officer Opinion Survey on Bank Lending Practices, also released this week, which noted that banks are tightening their loan standards for multifamily construction and development activity.
Source: www.costar.com
Consumer demand for rental apartments remained strong while the market for apartment properties stayed relatively unchanged in the latest National Multifamily Housing Council (NMHC) Quarterly Survey of Apartment Market Conditions.
The market tightness, sales volume and equity finance indexes all remained near or above the break-even level of 50, according to NMHC. However, its debt financing index declined significantly to 35 from 60. The index fell below 50 for the first time since January 2014.
“The decline in the debt financing index is significant,” said Mark Obrinsky, NMHC’s senior vice president of research and chief economist. “In large part it reflects two things: the modest rise in interest rates, and tightening initiated by Freddie Mac and Fannie Mae as they began to approach their lending volume caps. Regulator action to keep multifamily mortgage finance flowing has averted a crisis, but lending conditions remain somewhat tighter.”