How did multifamily investment market fare in Q1?

Growing net operating incomes (NOI) and low-interest rates boosted the investment conditions for multifamily properties in the first quarter of 2021, according to Freddie Mac.

Freddie Mac’s Multifamily Apartment Investment Market Index (AIMI) held steady in Q1, dipping 0.1% as mortgage rates dropped by six basis points. The index increased in 13 metros while 11 markets posted quarterly contraction.

NOI growth was generally positive across markets. Over the quarter, NOI increased in 18 markets while NOI contracted in seven markets. NOI grew the fastest in Tampa (3.1%) and Phoenix (2.7%).

“The low-rate environment and reliable net operating incomes are propelling the market forward,” said Steve Guggenmos, vice president of Freddie Mac Multifamily Research & Modeling. “With a healthy level of demand and enthusiasm around the reliable asset class, growing property values continue to be the limiting factor in the index.”

The report also showed that property prices were on the rise in 22 of 25 markets. New York and San Francisco continued to experience declines, down to -2.2% and -1.1% over the quarter, respectively. Meanwhile, prices in Los Angeles contracted very slightly at -0.1%.