2022-06-21 | OTCQB: FMCC | Press release
MCLEAN, Va., June 21, 2022 (GLOBE NEWSWIRE) — The Freddie Mac (OTCQB: FMCC) Multi-Family Apartment Investment Market Index® (LOVE®) fell 5.3% in the first quarter of 2022, with the index down 6.1% from the first quarter of 2021. second consecutive quarter. Over the past year, house prices have risen 21.1%, RNE by 19.8% and mortgage rates have risen by 41 basis points, the biggest increase since 2018.
“The offsetting impact of growth in prices and mortgage rates on the increase in net operating income indicates that investors are paying more per dollar of income than a year ago,” said Steve Guggenmos, vice -president of research and modeling at Freddie Mac Multifamily. “Despite dramatic growth in net operating income, we are seeing a decline in the index nationally and in all markets, which suggests that it may be increasingly difficult to find investment opportunities. attractive multi-family investment.”
During the quarter, the AIMI decreased in the country and in all 25 markets. RNE growth was very strong, but house price growth was much stronger and mortgage rates rose significantly.
- The national growth of the NOI was 2.5% and every metro saw growth. The fastest growing was Miami at 5.6% while the slowest growing was Portland at 0.9%.
- Real estate prices have increased in the country and in all markets. Price growth moderated from last quarter, but remained strong at 4.3% for the country.
- Mortgage rates rose 29 basis points – the biggest increase since the second quarter of 2018.
During the year, AIMI decreased in the country and in 18 of the 25 markets, while 7 markets experienced growth. Similar to last quarter, metros generally saw record annual NOI growth and house price growth.
- The growth of the NOI has been universally positive for the country and all markets. Surprisingly, NOI growth exceeded 10% in all but one city (Minneapolis). Orlando led the way with annual growth of 33.1%, the highest annual NOI growth of any city in AIMI’s history.
- Real estate prices have increased in the country and in all markets. Like the growth of the NOI, the growth in house prices has been amazing. The slowest growth was Chicago at 4.9%, while prices in Phoenix rose 45.6%.
- Mortgage rates rose 41 basis points – the biggest annual increase since the fourth quarter of 2018
In addition to national and local values, a sensitivity table is available that captures how the index value adjusts to changes in certain underlying variables. Additional information about AIMI can be found on the Freddie Mac Multifamily website, including an FAQ and video.
AIMI is an analytical tool that combines multifamily rental income growth, house price growth and mortgage rates to provide a single index that measures multifamily market investment conditions. A rise in AIMI quarter over quarter implies an increasingly favorable environment for multifamily investment opportunities, while a decline suggests that attractive investment opportunities are becoming harder to find relative to the previous period.
Freddie Mac Multifamily helps ensure an abundant supply of affordable rental housing by purchasing and securitizing mortgages on apartment buildings nationwide. About 90% of mortgages purchased support rental housing for households earning 120% of the region’s median income or less. Freddie Mac securitizes about 90% of the multi-family loans it purchases, thereby transferring the majority of expected credit risk from taxpayers to private investors.
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our founding by Congress in 1970, we have made housing more accessible and affordable for buyers and renters in communities nationwide. We are building a better housing finance system for buyers, renters, lenders and ratepayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.