Strong multi-family investment environment continues as Freddie Mac’s AIMI rebounds in Q2
MCLEAN, Virginia, September 13, 2021 (GLOBE NEWSWIRE) – The Freddie mac (OTCQB: FMCC) Multifamily apartment investment market indexÂ® (AIMIÂ®) turned positive in the second quarter of 2021 as growth in net operating income (NOI) and low interest rates strengthened the investment environment for multi-family properties. Overall, the index is up 0.7% per quarter and 2.6% per year after a slight decline in the first quarter, with most markets in positive territory. Multi-family mortgage rates rose 5 basis points in the quarter, the first quarterly increase since the fourth quarter of 2018, but are still down 37 basis points per year.
âThis quarter’s AIMI shows a positive environment for multi-family investors in most markets, including those hit hard by the pandemic,â said Steve Guggenmos, vice president of Freddie Mac Multifamily Research & Modeling. “The low interest rate environment and strong net operating results offset a slight increase in mortgage rates, indicating a healthy market heading into the second half of 2021.”
During the quarter, AIMI increased in the country and in 22 of the 25 markets tracked by the index. The only markets not experiencing growth are Jacksonville, Minneapolis and Phoenix.
- NOI’s growth has been universally positive for the markets and the nation. The NOI grew the fastest in Orlando and Phoenix at 8.3% and 8.5%, respectively. Even the slowest growing subways, Minneapolis and New York, posted strong growth of 2.6%.
- Real estate prices have increased in the country and in 24 of the 25 markets. New York was the only subway to experience a drop of -1.5%.
- Mortgage rates rose 5 basis points – the first quarterly increase since the fourth quarter of 2018.
During the year, AIMI increased in the country and in 20 markets, while five markets saw AIMI decline.
- NOI increased in the country and in 17 markets. Like last quarter, New York and San Francisco posted double-digit NOI declines (-13.0% and -15.1%, respectively), which is very rare for any market on a year-over-year basis. . Six other markets posted annual NOI losses.
- The country and 22 markets saw real estate price growth, while only two subways (New York and San Francisco) saw a contraction. One subway (Oakland) has not experienced growth or contraction.
In addition to national and local values, a sensitivity table is available which captures how the index value adjusts for changes in certain underlying variables. Additional information on AIMI is on the Freddie Mac Multifamily website, including Faq and one video.
AIMI is an analytical tool that combines growth in multi-family rental income, growth in property prices and mortgage rates to provide a single index that measures investment conditions in the multi-family market. A quarter-over-quarter rise in AIMI implies an increasingly favorable environment for multi-family investment opportunities, while a decline suggests that attractive investment opportunities are becoming harder to find compared to the previous period.
Freddie Mac Multifamily helps ensure a plentiful supply of affordable rental housing by purchasing and securitizing mortgages on apartment buildings nationwide. About 90% of mortgages purchased support rental housing for households earning 120% of the region’s median income or less. Freddie Mac securitizes around 90% of the multi-family loans he purchases, thereby shifting the majority of the credit risk expected from taxpayers to private investors.
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our inception by Congress in 1970, we’ve made housing more accessible and affordable for buyers and renters in communities across the country. We are building a better housing finance system for buyers, tenants, lenders and taxpayers. Learn more about FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.