Demand for apartment rentals continued to rise in the second quarter, while the use of debt financing declined, according to the National Multifamily Housing Council.
The NMHC's Debt Financing Index declined to 35 in the second quarter from 60, the first time that the index has fallen below 50, according to the council's Quarterly Survey of Apartment Market Conditions.
The Equity Financing Index fell to 49 from 55, the first time the index has fallen below 50 since 2013.
"The decline in the debt financing index is significant," Mark Obrinsky, the NMHC's chief economist, said in a news release. "In large part it reflects two things: the modest rise in interest rates and tightening initiated by Freddie Mac and Fannie Mae as they began to approach their lending volume caps. Regulator action to keep multifamily mortgage finance flowing has averted a crisis, but lending conditions remain somewhat tighter."
The Sales Volume Index rose by one point to 53 in the quarter.
The Quarterly Survey is based on a poll of 123 senior executives at apartment-related firms between July 13 and July 20.
