Multi-Family Sector Beginning To Improve

Washington, DC, Nov. 11, 2009--The multifamily sector of the housing market showed signs of improvement in the third quarter, according to the National Association of Home Builders.

NAHB’s Multifamily Market Rental Indices for the third quarter showed increases compared to a year earlier. The index for current starts of low-rent apartments rose from 22.2 to 30.4, while the index for low-rent starts in the next six months rose from 20.3 to 41.3.  The index for current starts of market-rent apartments also rose from 15.7 to 19.4, and from 19.1 to 32.7 for future starts.

The current condo index rose to 24 from 8.1 a year earlier. The future index for condo starts gained more than 20 points to reach 30.4. The index measuring traffic of prospective condo buyers rose to 41.3 from 13.8 a year ago.

Numbers below 50 indicates more multifamily builders reported that market conditions were weaker since the previous quarter. All the multifamily supply indexes have been running below 50 since the third quarter of 2007.
 
“The move toward more stable condo markets in many areas is likely a response to increased market activity from the first-time home buyers who were eligible for the $8,000 credit and chose to purchase condos,” said NAHB Chief Economist David Crowe.

“Until we begin to see job growth instead of job losses,” said Crowe, “we won’t see the level of household formations necessary to push rental vacancy levels back down, and rents back up to levels that will more easily support professional management and maintenance.”