NMHC: Apartment Market Conditions Continue to Tighten
Apartment market conditions tightened while debt and equity financing dynamics worsened over the past three months, according to a new survey from the National Multifamily Housing Council (NMHC).
“Job growth picked up somewhat during the first half of the year after a lackluster 2025. This, combined with declining apartment deliveries, helped translate to modestly tighter conditions—higher rent growth and lower vacancy rates—over the past three months,” said Chris Bruen, NMHC’s senior director of research and chief economist.
“Even so, rents continued to decrease in many high-supply Sun Belt markets. At the same time, higher inflation has led to higher interest rates, worsening borrowing conditions, and a corresponding pullback in equity capital.”
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In NMHC’s quarterly survey of apartment conditions in July with insights from nearly 160 CEOs and other senior executives, the Market Tightness Index was the only one to hit above the breakeven level of 50.
- The Market Tightness Index rose to 57, indicating tighter market conditions compared with three months ago. Over a quarter of the respondents, 29%, reported tighter market conditions than the prior quarter, while 15% said they thought conditions were looser. Over half of the respondents, 55%, cited unchanged conditions.
- The Sales Volume Index at 46, down from 52 in April, signals a decrease in deal flow. Over a quarter of respondents, 27%, reported lower sales volume, while 19% reported an increase. Almost half of respondents, 46%, reported unchanged conditions.
- The Equity Financing Index dropped to 44, indicating less availability. The majority of respondents, 65%, found equity conditions unchanged from April, while 19% reported equity being less available and 7% more available.
- The Debt Financing Index reading dropped below the breakeven mark, coming in at 46. Being below the breakeven level indicates worsening borrowing conditions, but respondents were mixed. Half reported unchanged borrowing conditions, while 26% reported it being a worse time to borrow than three months ago and 17% said it’s a better time to borrow.
Source: Multifamily Executive
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