April apartment market conditions show improvement

Notably, almost half of respondents indicated they have received some amount of rent relief


Apartment market conditions showed improvement in the National Multifamily Housing Council’s Quarterly Survey of Apartment Market Conditions for April 2021, as the industry begins to see signs of optimism. While the Sales Volume (77) and Equity Financing (68) indexes both came in above the breakeven level (50) for the third consecutive quarter, the index for Market Tightness (81) signaled tighter conditions for the first time since October 2019. The Debt Financing index (44) indicated weaker conditions.

“We are finally seeing improvement in most markets around the country,” noted NMHC Chief Economist Mark Obrinsky. “While gateway metros are still generally facing lower occupancy and rent levels compared to a year ago, conditions now appear to be on an upward trajectory. On the other hand, many Sun Belt markets continue to see substantial rent growth and strength in fundamentals.

“Following what we saw as an inflection point last quarter, with a majority of respondents (53 percent) indicating market conditions were unchanged, two-thirds (67 percent) of respondents this quarter observed tighter conditions in their apartment markets. We move forward with cautious optimism, as vaccine rollout is well underway and there is hope that all residents will be able to return to work soon.”

  • The Market Tightness Index increased from 43 to 81, indicating tighter market conditions for the first time in six quarters. Two-thirds (67 percent) of respondents reported tighter market conditions than three months prior, compared to only 5 percent who reported looser conditions. Twenty-eight percent of respondents felt that conditions were no different from last quarter.
  • The Sales Volume Index increased from 53 to 77, marking the highest index level since October 2010. More than half (60 percent) of respondents reported higher sales volume than three months prior, while 31 percent deemed volume unchanged. Just 7 percent of respondents indicated lower sales volume from the previous quarter.
  • The Equity Financing Index increased from 58 to 68. While 42 percent of respondents reported that equity financing was more available than in the three months prior, a similar share of respondents (39 percent) believed equity financing conditions were unchanged during the same period. A smaller portion (6 percent) of respondents indicated equity financing was less available.
  • The Debt Financing Index decreased from 49 to 44. As the only index below the breakeven level, 23 percent of respondents reported better conditions for debt financing compared to three months prior, while 35 percent felt that financing conditions were worse. An additional 34 percent of respondents signaled that conditions were unchanged in the debt market.

As rollout of the Emergency Rental Assistance Program (ERAP) has been relatively slow to get off the ground, we asked respondents if they have received rent relief money in markets where they operate. Overall, nearly half of respondents (47 percent) indicated they have accessed federal rent relief funds in at least some of their areas of operation – 5 percent in all areas of operation and 42 percent in just some areas. Roughly a quarter (26 percent) of respondents, meanwhile, claim not to have received any rent relief funds at this point. Sixteen percent of respondents reported that while federal rent relief funds have not been available to them at this time, they have received other relief funds from local governments or charitable relief. Finally, the remaining 11 percent of respondents indicated that they do not plan on accessing federal rent relief funds at all. (These figures exclude respondents who indicated this question was not applicable to them.)

View the full survey data online

About the survey:

The April 2021 Quarterly Survey of Apartment Market Conditions was conducted April 5-12, 2021; 110 CEOs and other senior executives of apartment-related firms nationwide responded.