NMHC: Rates Hurting Apartment Finance

A steady rise in interest rates has resulted in a "sharp decline in debt financing conditions" for apartment properties, according to the National Multi Housing Council.The NMHC's April 2006 quarterly survey of apartment market conditions found that an index of debt financing conditions had dropped to 21, its lowest level since January 2000, and the third-lowest level in the survey's history. Over 69% of survey respondents, the second-highest ever, said that borrowing conditions for debt financing had worsened in the last three months, based on interest rates and nonrate conditions. However, they also see mortgage financing as being widely available, the NMHC said. Another index showing availability of equity financing edged down only a little, indicating that equity finance conditions are "unchanged" compared with those of three months ago, according to the multifamily industry trade association.