Interest in apartment investment weakens despite solid NOI growth

The US multifamily market saw a dramatic increase in net operating income (NOI) in the first quarter of 2022, Freddie Mac reported.

However, the strong NOI gain (+19.8%) was canceled by accelerated property price growth (+21.1%) and higher mortgage rates (+41 basis points). As a result, Freddie Mac’s Multifamily Apartment Investment Market Index (AIMI) declined by 5.3% quarter over quarter and was down 6.1% compared to Q1 2021.

Steve Guggenmos, vice president of research and modeling at Freddie Mac Multifamily, said the offsetting impact of price growth and mortgage rates on increasing net operating income indicates investors are paying more per dollar of income than a year ago.

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