Despite 2023Q4 Setback, Freddie Mac Multifamily Apartment Investment Market Index Finishes 2023 Up Nationwide

On Monday, Freddie Mac released its Multifamily Apartment Investment Market Index® (AIMI®) for 2023Q4. The AIMI decreased in Q4 but increased over the full year, with the annual gain indicating that investment conditions were better in Q4 compared to 2022Q4.

With mortgage rates persistently high, the AIMI fell nationally and in all 25 regional markets measured for Q4, as did net operating income (NOI) over the same period. Despite the Q4 dip, the AIMI finished 2023 up for the year nationally and in the majority of regional markets.

The downward trend in NOI was pronounced in Q4, with a decrease nationwide and in all markets. NOI contracted between 0.2% in Chicago to 3.5% in Charlotte. Property prices dropped nationally and in all markets except for New York, which experienced a small gain of 0.2% over the quarter.

In remarks and analysis accompanying the release of the AIMI, Freddie Mac Senior Director of Multifamily Research Sara Hoffmann said:

“The end of 2023 was a tale of two directions for [the] AIMI. The index finished 2023 up overall for the year, but [the] fourth quarter was down across the board. The market continues to adjust to the new reality of higher interest rates, which were offset by a steep contraction in property prices, while NOI was virtually flat when we look at 2023 as a whole. All in all, [the] AIMI suggests that investors are paying less per dollar of property income compared with one year ago.”