Monday, October 22, 2018

NMHC: Apartment Market Tightness Index remained negative for 12th Consecutive Quarter

by Bill McBride on 10/22/2018 03:35:00 PM

The National Multifamily Housing Council (NMHC) released their October report: October Apartment Market Conditions Experience Headwinds

The Market Tightness Index was below 50 (looser conditions) for the 12th consecutive month. The Index came in at 41 in October.

This index helped me call the bottom for effective rents (and the top for the vacancy rate) early in 2010. And it also helped me call the bottom in vacancy rate more recently.

Apartment Tightness Index
Click on graph for larger image.

This graph shows the quarterly Apartment Tightness Index. Any reading below 50 indicates looser conditions from the previous quarter. This indicates market conditions were looser over the last quarter.

This is the twelfth consecutive quarterly survey indicating looser conditions - it appears supply has caught up with demand - and I expect rent growth to continue to slow.