Deciphering the Recent Decline in AIMI®
In the fourth quarter of 2022, Freddie Mac’s Apartment Investment Market Index® (AIMI) declined by -24.9% — the largest annual drop on record going back to 2000. This drop signifies worsening investment conditions, mostly driven by higher interest rates, which increases the cost of financing substantially.
In this report, we analyze the three inputs (net operating income, property price growth and mortgage rates) that combine to create the index to determine how much each component impacts AIMI, along with other considerations like:
- How has each component impacted the index historically?
- What is the relationship between the components?
- How has recent events contributed to the decline?