The FINANCIAL — Freddie Mac on December 20 announced multifamily investing fundamentals grew stronger in the third quarter, both nationally and in all 13 major metro markets tracked by the Freddie Mac Multifamily Apartment Investment Market Index(SM) (AIMI(SM)).
This marks the third consecutive quarter of positive growth tracked by AIMI, a free online analytical tool that combines multifamily rental income growth, property price growth and mortgage rates to provide a single index that objectively measures multifamily market investment conditions.
Nationally, AIMI values increased just 0.4% in the third quarter to 110.9 from 110.4 in the second quarter. Local markets experiencing the biggest quarterly gains were Washington, D.C. (7.3%), Orlando (4.4%) and Atlanta (3%).
A rise in AIMI from one quarter to the next implies an increasingly favorable environment for multifamily investment opportunities, while a decline suggests that attractive investment opportunities are becoming more difficult to find, according to Freddie Mac.
“The AIMI index has been indicating a favorable investment environment for apartments since 2009. A move up in the index in the third quarter marked the third consecutive quarterly increase in the index, but it is down slightly year-over-year. The Index has been in a consistent range since 2013,” said Steve Guggenmos, vice president of Freddie Mac Multifamily Research and Modeling.
Looking beyond the national level, AIMI values fell in five of 13 metros tracked over the last quarter, and fell in 10 metros during the past year. The only three markets where AIMI increased relative to this time last year were Washington, DC, (12.7%), Atlanta (2.4%), and Dallas (0.9%).
In addition to national and local values, AIMI also provides a sensitivity table that shows how the Index value adjusts based on changes in the underlying variables. Additional information about AIMI is on the Freddie Mac Multifamily website and includes FAQs and a video.
Freddie Mac Multifamily helps ensure an ample supply of affordable rental housing by purchasing and securitizing mortgages on apartment buildings nationwide. The loans range from $1 million to several billions and roughly 90 percent support rental units for lower income households. Freddie Mac securitizes about 90 percent of the multifamily loans it purchases, thus transferring the vast majority of the expected credit risk from taxpayers to private investors.