Magazine article Mortgage Banking

Apartment Market Continues to Strengthen

Magazine article Mortgage Banking

Apartment Market Continues to Strengthen

Article excerpt

FOR THE NINTH QUARTER IN A ROW, SENIOR apartment executives reported higher occupancy rates, rising rents, increased sales volume and equity available, according to the National Multi Housing Council (NMHC), Washington, D.C.

NMHC's October 2005 Quarterly Survey of Apartment Market Conditions noted that the Debt Financing Index dropped to 38--the first under-50 reading since July 2004. A score of greater than 50 means more respondents saw improving conditions than worsening conditions over the previous three months.

"This clearly reflects the rise in interest rates over the past few months," noted NMHC. "It may also reflect some tightening of lending standards."

Meanwhile, 75 percent of survey respondents reported improved demand for apartments, measured by lower vacancy rates, higher rents or both.

Only 2 percent reported looser conditions, suggesting that there were virtually no markets where conditions worsened and an increasingly large number of markets where demand improved further. As a result, the survey's Market Tightness Index rose to another all-time high of 87 in October--the ninth consecutive quarter of improving demand.

"Even with record-level single-family home sales, demand for apartment residences by individuals and families continues to strengthen virtually across the board," noted NMHC Chief Economist Mark Obrinsky. "If the homeownership market should start to cool, demand for apartments could rise even further. …

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