Freddie Mac released its mid-year multifamily outlook for 2013 on Thursday, which included a new Freddie Mac Multifamily Investment Index that measures the attractiveness for investing in apartment properties.

According to the index, apartments are still a good investment in most metropolitan markets it tracks.

“As markets move it is important to have an objective measure of current conditions. Although the multifamily market has slowed, it remains an attractive investment across the majority of the metro areas for equity and debt investors,” said Victor Pa, vice president of multifamily investments and advisory.

Increased supply is a key risk for some metropolitan markets, while market fundamentals such as rents and vacancies are improving. Although recovery of the job market and strengthening in the single-family market is likely to shift some demand away from the multifamily market, renter-occupied units will remain strong, the outlook claimed.

Permit numbers for new multifamily housing has slowed while delivery of new supply is still on the rise. However, the appetite of investors for this sector could be cooling down some. With that being said, future construction levels may remain close to pre-recession levels.

Among the top 10 growing markets are New York, San Francisco, Denver, Seattle and Los Angeles, while Jacksonville, Norfolk and Washington, D.C. aren’t fairing quite as well.

Freddie claimed that cap rates may rise as interest rates continue to increase. A 1% higher growth in employment could lower cap rate spread by 20-30 basis points.

The brand new investment index, which measures the relative attractiveness of investing in multifamily properties over time, looked attractive when there are relatively strong cash flows for each dollar of equity invested because multifamily property returns are driven by property cash flows.

While the index does not forecast future conditions, it does provide a glimpse over time of the national picture, as well as one for Atlanta, Chicago, Dallas, Los Angeles, New York, Washington, D.C. and Seattle.

In the years that led up to the recession, the index shows that investing in apartments was becoming less attractive and hit a floor in 2007, with property prices at their peak. After the recession, the index rebounded due to growth in property income and lower rates.