NMHC: "Apartment Market Continues to Loosen"

Today, in the CalculatedRisk Real Estate Newsletter: NMHC: "Apartment Market Continues to Loosen"

Excerpt:

From the NMHC: Apartment Market Continues to Loosen Amidst Worsening Financing Conditions

Apartment market conditions continued to weaken in the National Multifamily Housing Council’s (NMHC’s) Quarterly Survey of Apartment Market Conditions for April 2024. With the exception of Sales Volume (52), which turned positive this quarter, the Market Tightness (41), Equity Financing (49), and Debt Financing (44) indexes all came in below the breakeven level (50).
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"[T]he U.S. apartment market continues to absorb historic levels of new supply, resulting in rising vacancy rates and decreasing rent growth.”
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• The Market Tightness Index came in at 41 this quarter – below the breakeven level (50) – indicating looser market conditions for the seventh consecutive quarter. That said, a plurality of respondents (42%) thought market conditions were unchanged compared to three months ago, while 37% thought markets have become looser. Twenty percent of respondents reported tighter markets than three months ago, up from 5% in January.

The quarterly index increased to 41 in April from 23 in January. Any reading below 50 indicates looser conditions from the previous quarter.

This index has been an excellent leading indicator for rents and vacancy rates, and this suggests higher vacancy rates and a further weakness in asking rents. This is the seventh consecutive quarter with looser conditions than the previous quarter.

There is much more in the article.