Apartment market conditions showed continued improvement in the National Multifamily Housing Council’s Quarterly Survey of Apartment Market Conditions for July 2021. For the first time since October 2015, the Market Tightness (96), Sales Volume (79), Equity Financing (69), and Debt Financing (71) indexes all came in above the breakeven level (50).
“We are witnessing strong, broad-based demand for apartments as the U.S. economy continues to recover,” noted NMHC Chief Economist Mark Obrinsky. “Many U.S. gateway metros, which were among those hardest hit during the coronavirus pandemic, have now seen their occupancy rates return to near-pre-pandemic levels. Meanwhile, rent growth remains particularly strong in a number of Sun Belt and Mountain markets.”
“Nearly all (92 percent) respondents this quarter observed tighter conditions in their apartment markets, signaling that the worst of the pandemic could be behind us. Apartment sales volume is strong as well, bolstered by continued low interest rates and strong availability of equity financing.”
The Market Tightness Index increased from 81 to 96 – the highest index number on record – indicating widespread agreement among respondents that market conditions have become tighter. Nearly all (92 percent) respondents reported tighter market conditions than three months prior, compared to only 1 percent who reported looser conditions. Seven percent of respondents felt that conditions were no different from last quarter.
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This graph shows the quarterly Apartment Tightness Index. Any reading above 50 indicates tighter conditions from the previous quarter.
This indicates market conditions tightened further in July, after being especially weak during the early months of the pandemic.