NAHB Multifamily Housing Market Index Released; Struggling Market Expected to Continue

Posted by Teresa on March 17, 2010 under Housing Trends | icon: commentBe the First to Comment


The National Association of Home Builders recently released its Multifamily Housing Market Index for the 4th Quarter 2009. The Index shows a dampening of enthusiasm among those polled, to say the least.

At the time the data was complied, rental housing vacancies were expected to continue increasing, as was supply. Asking rent dropped from the 3rd quarter, but effective rents rose slightly over the same period.

Another troubling figure from the report is Percent of New Apartments Rented within 90 days, which dropped from 45.8 in the 3rd quarter to 34.1 in the 4th.

However, a positive note is seen in the increase in volume of calls from prospective renters. That figure was 8 points higher than in Q3 2009 and 6 points higher than Q2 2009.

What does all this mean for rental property owners and managers? Well, if you are sitting on brand new apartments, you will likely need to work harder than before to get them rented. But that doesn’t mean your phone isn’t ringing at all—in fact, the index shows a healthy increase in Prospective Renter call volume.

Perhaps more amenities, rent concessions, or lower rent will continue to be required to fill these vacant properties. Are callers finding a better deal in single-family rentals? Are they staying home with mom and dad rather than move into their own apartment? Or do renters continue to double- and triple-up with their friends, waiting to see what happens with rents?

Whatever is going on in renters’ minds, the message is clear: the multifamily rental market is expected to stay soft—and painful for those who are in it—at least for the foreseeable future. Stay tuned for more fascinating facts and figures as they are reported!