The market for apartments and condominiums is looking positive according to a survey of builders.
The National Association of Home Builders says that its Multifamily Index gained 7 points to 53 in the fourth quarter of 2017. The index is on a scale of 0-100 so the rise has swung it into positive territory.
“The positive MPI reading is consistent with builder sentiment readings in other segments of the housing industry,” said NAHB Chief Economist Robert Dietz. "Continued job growth and increasing household formation are key drivers for the multifamily market moving forward.”
The three components of the index all gained; construction of low-rent units (up 2 points to 56); market-rate rental units (up 11 points to 54); and for-sale units (up 9 points to 49).
The NAHB index of vacancies remained at a reading of 41. It has remained stable since 2013 having peaked in 2009 with a reading of 70.
“Multifamily developers continue to see solid demand in many parts of the country,” said Steven Lawson, president of The Lawson Companies in Virginia Beach, Va., and chairman of NAHB’s Multifamily Council. “However, developers need to be careful to manage costs as prices of land, labor and some building materials continue to rise."
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