Although the rental market remained sluggish in the fourth quarter, with indexes tracking demand below 50 for all classes of apartments, conditions are improving slightly. Demand for Class A apartments was up almost five points to 40.0 on the MMI, and multifamily builders appear optimistic that the next six months will show continued improvement for both market-rate and affordable apartments.
The indexes tracking builder expectations rose dramatically to 58.4, 58.3 and 58.0 respectively for Class A, Class B and Class C apartments. Survey respondents said the volume of calls from prospective renters was up and that 66% of their new units rented within 90 days during the fourth quarter of 2003, compared to 57.9% in the previous quarter.
“Historically, rental apartment demand has been dependent on job growth,” said NAHB Chief Economist David Seiders. “While the recession has been over for a while, we haven’t seen enough job growth to fuel strong rental demand, but with improving economic indicators, we hope to see a turnaround soon.”
2004 NAHB Multifamily Pillars of the Industry Conference & Awards Gala
Don’t miss the Multifamily Pillars of the Industry Conference and Awards Gala, the premier educational and networking event of the year for the multifamily industry, in Palm Springs, CA, March 28-30. Explore both the current and future state of the multifamily industry. Click here for more information.
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