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The market tightness index came in at 31 in the first quarter, indicating looser market conditions. About 51% of the survey respondents reported markets to be looser than three months ago, while only 14% thought markets have become tighter. Meanwhile, 34% thought market conditions held steady over the past three months.
The sales volume index reading of 26 marked the fourth straight quarter of decreasing deal flow, with 56% of respondents reporting lower sales volume. The equity financing index also fell for the fifth consecutive quarter to a reading of 23, reflecting views (60%) that equity financing has become less available.
The debt financing index posted its seventh quarterly decline to 29. Fifty-three percent (53%) of respondents said debt financing has become less available, nearly a quarter (24%) thought that conditions were unchanged, while 12% reported that now is a better time to borrow than three months ago.
“The transaction market, meanwhile, remains at a virtual standstill, with current apartment owners unwilling to offer buyers the lower prices necessary to compensate for both this diminished economic outlook and the elevated cost of debt,” Walter added.
“The Federal Reserve remains committed to bringing down inflation via tighter monetary policy, thereby raising the prospect of slower economic growth,” NMHC wrote in the report. “A majority of quarterly survey respondents (64%) believed that a bumpy landing is the most likely scenario, where growth slows to a below average or negative rate and then rebounds to a sustainable pace. Twenty-one percent (21%) of respondents thought that the Fed’s actions will lead to a hard landing, or recession scenario, while just 11% predicted a soft landing, where economic growth simply slows to a more sustainable pace.”
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