The multifamily housing market showed signs of returning to stability in the first quarter, according to the latest National Association of Homebuilder's
The multifamily housing market showed signs of returning to stability in the first quarter, according to the latest National Association of Homebuilder's Multifamily Market Index.
The current production index for market-rent apartments jumped to 30.6 ó 14 points higher than a year earlier ó while future demand expectations for Class A apartments rose to 49.6 from 34 and for Class B to 53.1 from 43.9. For lower-rent units and for-sale condominiums, the current production indexes rose to 38.2 and 25.0, respectively, more than 10 points higher than in Q1 2009.
The index measures multifamily builder sentiment based on production and occupancy at the current time compared to the previous quarter, as well as builders' expectations for conditions over the next six months. An index number greater than 50 indicates that builders who view conditions as getting stronger outnumber those who view conditions as becoming weaker. The values are not seasonally adjusted.
Builders' expectations for future production, though improved from a year ago, are still constrained by difficulty in obtaining loans to fund development. At 32.7, condo starts showed the lowest expectation of increase. The future production index for lower-rent communities is 45.1 and for market-rate rent communities 43.5.
ìThe most encouraging part of the [index] is the number of multifamily builders who are expecting gains in rental occupancy over the next six months,î says NAHB Chief Economist David Crowe. ìBuilders' optimism is directly related to recent positive employment news and expectations for the trend to continue.î
After two consecutive monthly gains, builder confidence in the market for newly built, single-family homes fell to February levels, before the home buyer tax credit-related surge. These findings are from the National Association of Home Builders/Wells Fargo Housing Market Index. The HMI dropped five points to 17 in June.
ìIn the coming months, an improving economy, rising employment, low mortgage rates and stabilizing home values should help the housing market move forward,î he says.