In the first quarter, the Freddie Mac Multifamily Apartment Investment Market Index (AIMI) rose by 5.3%, but it decreased year over year, with the annual index down 16.6%.
AIMI’s quarterly increase nationwide and in all 25 markets was a sharp reversal from last quarter’s drop. Meanwhile, the annual decline nationwide and in all 25 markets was large but not as severe of a fall from the previous quarter.
“The annual decline in AIMI remained reflective of the year’s higher mortgage rates,” says Sara Hoffmann, director of multifamily research at Freddie Mac. “But over the prior quarter, mortgage rate volatility slowed down, and the increase in AIMI was mostly a product of property prices reacting to the higher mortgage rate environment.”
Net operating income (NOI) declined in the nation and most markets. However, no metros were deeply negative. The lowest performer was Raleigh, N.C. at -1.7%.
Property price performance was mostly negative, and prices nationally contracted by -7.2%. This is the first annual decline in property prices since the second quarter of 2010.