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May 13, 2016
1Q Results Drive 2016 Outlook
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Given the historic levels of multifamily investment and transactions in 2015, the collective outlook for 2016 from the outset has been more measured despite apartment demand fundamentals remaining quite positive. 

Part of what’s driving a conservative outlook is the economy’s painfully slow climb back from the Great Recession. The limp-along economy, together with uncertainty over interest rates and turmoil in certain global markets, is leaving industry executives without a sense of whether this is the new normal or whether we should be bracing for the next market swing.

But multifamily’s swift run out of the gate in the first quarter, along with a substantial amount of capital still circling the sector, suggests that deal flow might be more robust than some anticipate. But slowdown fears persist, with one industry researcher summarizing multifamily sentiment so far in 2016 as “cautious exuberance.”

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Housing Groups Argue Freddie Mac's Loss Should Spur Finance Reform

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Plus, NMHC’s Dave Borsos on the other ways Fannie and Freddie are in Washington’s crosshairs.

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Co-working Leader WeWork Unwraps Its Take on Apartment Living

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Multifamily Market Dashboard

Banks Report Tightening on Multifamily and AD&C Loans

Further supporting results of the latest NMHC Quarterly survey, where two-thirds of respondents reported less availability for construction financing, new analysis of Federal Reserve Board survey data show a continued tightening of multifamily and acquisition, development and construction (AD&C) lending.

Moreover, the pace of tightening on credit standards for these loans has increased over the past year. Tighter lending standards have focused on loan-to-value rations and debt-service coverage ratios.

A variety of factors, including new bank rules that require lenders to hold more capital aside for certain kinds of commercial real estate, are driving this trend. But already the multifamily industry is seeing apartment asset development slow.


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About Apartment Wire
A must-read for top apartment industry professionals, Apartment Wire is a timely review of emerging trends in apartment finance, development, management and technology and more, featuring both exclusive content from NMHC's staff of experts and provocative articles from across the web.
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