The component of the MMI that tracks current demand saw both moderately priced and lower-rent apartments reaching their highest levels ever in the first quarter of 2006, with moderately priced units topping the index at 71.4, up from 60.6 at the same time last year and about 30 points higher than the last quarter of 2002. Luxury rental apartments gained 1.6 points to reach 61.6 in the first quarter of 2006, compared to 60 at the same time last year.

According to NAHB Chief Economist David Seiders, the slowdown in the condo sector is due to serious affordability problems as well as a pullout by the investors who drove the market to unsustainable heights last year.

?EUR??,,????'??The changing supply-demand balance in the condo segment means that this component of the multifamily sector is slowing to a more sustainable level,?EUR??,,????'?? Seiders said.

The MMI component that gauges supply for market-rate rental apartments dropped to 54.6 during the first quarter of 2006, down from 57.2 at the same time last year. With supply tightening and demand on the rise, the component of the MMI that tracks rents reached a record high for the series, with an index of 73.1, up from 61.7 at the same time last year and almost 20 points higher than three years ago.