NAHB indexes show improvement in the second quarter
The market for apartments and condominiums showed improvement in the second quarter according to two indexes from the National Association of Home Builders.
“Overall, builders and developers are reporting increased confidence in the multifamily housing market,” said Gary Campbell, CEO of Gilbert G. Campbell Real Estate in Lowell, Mass., and chairman of NAHB’s Multifamily Council. “However, they still have to deal with the high cost of land, labor and regulation, which could impact future production.”
The NAHB Multifamily Market Survey’s Multifamily Production Index posted a reading of 56, up 16 points from the first quarter of 2019. The production index comprises three components and all of them gained in the second quarter.
The component that measures low-rent units increased nine points to 56, the component measuring market rate rental jumped 22 points to 64 and the component measuring for-sale units rose 19 points to 50.
Vacancies tightened
Meanwhile, the Multifamily Vacancy Index decreased 8 points to 40 indicating fewer vacancies and the lowest reading since the second quarter of 2017.
“Historically, the MPI and MVI tend to move one to three months ahead of U.S. Census figures for multifamily starts and vacancy rates, but in the second quarter we saw positive gains in both the NAHB and Census measures at the same time,” said NAHB Chief Economist Robert Dietz. “This is a sign of solid demand for multifamily housing in the second quarter, which was supported by low unemployment and a healthy number of household formations.”
