WASHINGTON -- The multifamily market showed signs of moving back toward stability in the first quarter of 2010, according to the latest NAHB's Multifamily Market Index (MMI), maintained by the National Association of Home Builders.
The current production index for market-rent apartments jumped to 30.6, 14 points higher than a year earlier, 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 the first quarter of 2009.
Builders' expectations for future production, though improved from a year ago, are still constrained by the difficulty in obtaining loans to fund development. Condo starts showed the lowest expectation for increased starts, at 32.7. The future production index for lower-rent communities is 45.1 and for market-rate rent communities 43.5.
"The most encouraging part of the MMI is the number of multifamily builders who are expecting gains in rental occupancy over the next six months," according to NAHB Chief Economist David Crowe. "Builders' optimism is directly related to recent positive employment news and expectations for the trend to continue. Current conditions are still depressed by multifamily builders' difficulty obtaining financing for acquisition, development and construction," Crowe added.
Read National Association of Home Builders' press release.
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