“The Fed’s interest rate hikes are having their intended effect on prices, as monthly apartment rents decreased nationwide,” Obrinsky said. He added that although rents are still higher than year-ago levels, this reflects past, not current rent inflation.

NMHC’s sales volume index was also below the break-even level at 10. Around 82% reported lower sales volume, similar to last quarter. Only 2% reported an increase in sales volume, while 13% saw no change.

The market tightness index for this quarter came in at 14, reflecting looser market conditions for two quarters in a row. The majority of respondents (78%) stated that the market is looser than it was three months ago, while only 5% reported it to be tighter. The remaining 16% saw no change in market conditions.

Furthermore, the equity financing index reading of 20 marked the fourth consecutive quarter in which equity financing became less available. Nearly two-thirds (63%) of respondents reported equity financing was less available than three months ago. Similarly, the debt financing index reading of 25 indicated the sixth straight quarter in which debt financing became less available. About 60% of respondents reported that conditions have worsened for debt financing.

“These rate hikes have also translated to a higher cost of debt financing, causing buyers to seek a higher rate of return,” Obrinsky said. “With sellers unwilling to budge much on pricing, apartment transaction volume has largely dried up.”