Magazine article Mortgage Banking

Apartment Market Continues to Strengthen

Magazine article Mortgage Banking

Apartment Market Continues to Strengthen

Article excerpt

Apartment markets continued their upward trajectory during the second quarter of 2006, according to the National Multi Housing Council (NMHC), Washington, D.C.

NMHC's July 2006 Quarterly Survey of Apartment Market Conditions noted that 75 percent of apartment executives reported tighter market conditions over the prior three months, measured by lower vacancy rates, higher rents or both.

"Improving rental demand in the face of rising interest rates and declining sales volume attests to the strong outlook for the apartment sector," said Doug Bibby, NMHC's president.

NMHC's Market Tightness Index increased slightly during the May to July period, to 85--now the second-highest index reading on record. An index reading higher than 50 indicates that, on balance, conditions are improving; a reading less than 50 indicates that conditions are worsening; and a reading of 50 indicates that conditions are unchanged, explained NMHC.

The Market Tightness Index has been 80 or higher for five consecutive quarters, and higher than 50 for 12 consecutive quarters, signaling a significant improvement in demand for rental housing. In contrast, the Index was 45 in July 2003 and 39 in July 2002.

Despite improving market conditions, apartment-building sales activity continues to slow from the record level of transactions conducted in 2005. …

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