Three Takeaways From NMHC’s October Apartment Market Survey

Financing and transaction activity weakened sharply in October, while rental market conditions showed more modest signs of softening.

Subscribe

The apartment market’s operating and investment environments are moving at different speeds. The National Multifamily Housing Council’s October Quarterly Survey of Apartment Market Conditions, released October 22, found a pronounced deterioration in financing conditions and sales activity. Rental market conditions also loosened, but the shift was considerably less widespread.

All four survey indexes were below their neutral threshold of 50. Beneath that shared direction, however, the responses reveal important differences in the pressures facing apartment owners and investors.

1. Financing conditions deteriorated sharply

NMHC’s Debt Financing Index fell from 46 in July to 10 in October, while its Equity Financing Index declined from 44 to 17. Both measures had been above 50 at the start of the year.

The underlying responses show how broadly conditions worsened. Some 81% of respondents said it was a worse time to borrow than three months earlier, compared with just 2% who reported improvement. Meanwhile, 66% said equity financing had become less available, and only 1% reported greater availability.

The simultaneous pullback in debt and equity creates a more difficult environment for assembling capital for acquisitions and development. The debt measure captures interest rates and non-rate terms, so it should be read as a broader assessment of borrowing conditions rather than a direct measure of changes in mortgage rates.

2. Apartment sales activity is losing momentum

The Sales Volume Index dropped from 46 in July to 22 in October, extending the reversal from April’s reading of 52. A majority of respondents — 61% — reported fewer deals than three months earlier, while only 4% reported an increase.

The financing pullback and transaction slowdown are occurring together. That combination is consistent with a market in which deals have become harder to execute, although the survey does not establish how much of the decline in activity was caused by financing constraints.

These readings describe the breadth and direction of reported changes, not their dollar magnitude. An index reading of 22 does not mean sales fell by 22%, nor does the survey measure the total value of apartment transactions.

3. Rental conditions softened, but most respondents saw little change

The Market Tightness Index declined from 57 in July to 47 in October. NMHC defines tighter markets as those with low vacancies and high rent increases; a reading below 50 signals that reports of loosening outweighed reports of tightening.

Yet 53% of respondents described rental market conditions as unchanged. Another 26% reported looser conditions, compared with 21% reporting tighter conditions. The balance shifted toward softening, but most respondents did not report a change.

October’s results suggest that the apartment market’s next hurdle may be access to capital more than a broad deterioration in rental demand. Most respondents reported little change in rental conditions, yet substantially more difficult financing and slower deal activity. For owners, that distinction is consequential: a property can continue to perform reasonably well while becoming harder to refinance or sell. Steadier operations alone may therefore be insufficient to bring buyers and sellers back together.

Methodology

NMHC surveyed 130 CEOs and other senior executives of apartment-related firms nationwide from October 1–15, 2026. Responses describe changes from three months earlier. Its diffusion indexes range from 0 to 100, with 50 indicating a balance between positive and negative responses. The indexes measure the direction and breadth of reported changes, rather than percentage changes in rents, financing volumes, or property sales.