Freddie Mac's Multifamily Apartment Investment Market Index (AIMI) increased by 5.3% quarter-over-quarter and 9.2% year-over-year in the third quarter of 2024, according to newly released data. This marks a consistent upward trend, with AIMI rising in all markets across the U.S. during this period, compared to mixed performances in previous quarters. The data highlights significant contributions from declining mortgage rates and property price adjustments, according to Freddie Mac.
Mortgage rates decreased by 35 basis points (bps) quarter-over-quarter, marking the second largest quarterly drop in five years. Over the year, rates declined by 12 bps, the first annual decrease since 2021. Meanwhile, property prices saw a nationwide decline but less severe than the previous quarter, with five markets experiencing drops exceeding -10%.
The West Coast and Mountain West led the annual growth, with Oakland up 17.3%, San Francisco rising 15.7%, and Denver increasing 16.1%. Nationwide net operating income (NOI) was mixed; it grew in 18 metro areas, fell in six, and remained flat in Las Vegas. Over the year, NOI rose in 11 markets but declined in 14.
Sara Hoffmann, senior director of Multifamily Research at Freddie Mac, attributed the improvement to reduced financing costs, annual NOI growth, and declining property prices, which bolstered investment conditions in the apartment sector.
