Fourth Quarter Index is Bullish on Apartment and Condominium Market
A recent report issued by the National Association of Home Builders provides an optimistic outlook for the multifamily market—another reason why investors around the nation are looking at multifamily properties and in some markets, are creating demand that is already starting to cause prices to rise.
The Multifamily Production Index (MPI), an indicator for the multifamily market that was released on March 8, showed improvement in the apartment and condominium housing market for a sixth consecutive quarter.
“The apartment and condo sector continues to be a bright spot for the housing market,” said NAHB Chief Economist David Crowe, in a written statement.
The MPI, which measures builder and developer sentiment about current conditions on a scale of 0 to 100, increased from 47.3 in the third quarter of 2011 to 48.9 in the fourth quarter—the highest reading since the fourth quarter of 2005. For details on the MPI, visit www.nahb.org/mms
During a presentation at the recent 2012 CENTURY 21® Global Conference in New Orleans, Mark J. Eppli, a professor of finance at Marquette University, also discussed the growing strength of the multifamily market. Citing research from Harvard University, Eppli indicated that renter household growth is expected to grow at a rate of 350,000 per year from 2010 through 2020. That projected growth is based on demographics: declines in the homeownership rate and pent-up demand from young adults currently living at home.