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Rising Prices, Mortgage Rates Drive Freddie Mac Apartment Investment Index Downward
The Freddie Mac Multifamily Apartment Investment Market Index (AIMI) fell by 4.8% in the fourth quarter of 2021, with the index down 2.4% year over year. Record multifamily price appreciation, which saw its largest single-quarter growth in the history of the index, and rising mortgage rates more than offset unprecedented growth in NOI.
Over the past year, property prices grew by 19.6%, mortgage rates increased by six basis points and NOI grew by 17.7%, according to Freddie Mac.
“The year-over-year AIMI decline shows us that it may be more difficult now to find attractive multifamily investment opportunities in some markets than it was a year ago,” said Steve Guggenmos, VP of research & modeling at Freddie Mac Multifamily. “Even though we’re seeing off the charts net operating incomes, prices are also rising dramatically. In most markets. Investors are paying more per dollar of property income compared with one year ago.”
- ◦Sale/Acquisition
