Freddie Mac’s Apartment Investment Market Index took a 7.1% hit over the last quarter as investors seem to be paying more per dollar of income for their multifamily investments.

The AIMI estimates how the multifamily investment environment changes over time nationally and in select metros. Updated quarterly, the index combines three market factors–multifamily mortgage rates, growth rates in multifamily property prices and growth rates in multifamily rental income–to create a number representing the multifamily investment climate that can be compared to prior time periods.

This quarter, the AIMI fell to 114.4, a 2.6% decrease from last quarter, meaning that multifamily investments increased in value and the market became more competitive over the last quarter, consistent with what other market data has been showing.

Freddie chalks this up to a combination of the natural, but quick, climb in property prices of 6.7% over the last year, 3.8% growth in net operating income and a 38-basis point increase in mortgage rates.

According to the report, the increase in mortgage rates is the main culprit behind the drop in the index as its substantial rise made borrowing for multifamily investments significantly more expensive.

This is to be expected because of multifamily’s strong performance and could very well continue as there are no signs that multifamily will undergo a meaningful slowdown in the near term, which will continue to pull the AIMI down.

Multifamily permitting remains unchanged on the year, slightly above the long-run average and growing at 2.6% annually, while favorable demographics and a booming labor market continue to keep the multifamily train rolling into 2019 and beyond.