Multifamily Housing Market Strengthens in Third Quarter

WASHINGTON D.C. - Apartment and condo builders are optimistic that the multifamily housing market will continue to strengthen over the next six months, according to the latest Multifamily Market Index (MMI), recently released by the National Association of Home Builders (NAHB).

Condos continued to lead the multifamily market in the third quarter of 2004, with the for-sale supply index up almost four points from this time last year, to 56.9 from 53.5. Builders participating in the MMI survey said they expect that number to stay above 50 for at least the next six months.

All classes of rental apartments showed gains on the index gauging demand in the third quarter of 2004. The biggest increase in demand was reported for Class C apartments - the lower-rent category - which jumped 10 points from a year ago to its current index value of 53.8. Demand for luxury units rose 3.3 points from last year's third quarter, while demand for average market-rate communities rose about nine points.

?EUR??,,????'??This quarter's MMI results confirm that the turnaround we saw beginning during the first part of this year has solidified,?EUR??,,????'?? NAHB President Bobby Rayburn said. ?EUR??,,????'??With the economy generating additional jobs, new households are forming, and that means that there's a greater demand for rental housing.?EUR??,,????'??

The index tracking the number of rental apartments available for rent continued its downward trend, registering a 6-point drop from 63.7 at this time last year to 57.7 in the second quarter 2004. At the same time, the index tracking the volume of calls from prospective renters saw a healthy increase, rising nearly 15 points to 52.9, up from 38.2 in last year's third quarter.