The apartment and condominium market posted gains in the third quarter of 2016, up from 50 to 53 in the National Association of Home Builders (NAHB) Multifamily Production Index (MPI), a measure of builder and developer sentiment that generally leads U.S. Census Bureau figures. An above-50 rating indicates an improving outlook.
Data on low-rent units, market-rate rental units and for-sale units (condominiums) are included in the MPI. In the third quarter, Low-rent units rose two points to 54, market-rate rental units rose four points to 57, and for-sale units rose four points to 59.
“Overall, multifamily developers remain positive about the market,” according to Andrew Chaban, chairman of the NAHB Multifamily Council. “However, in some areas of the country, developers have to overcome challenges of labor and lot shortages to meet demand.”
The labor shortage can be attributed partly to the lack of millennials in the sector—a recent NAHB report revealed the median age for construction workers has stood still at 42.
“This quarter’s MPI reading is consistent with our projection that the multifamily housing sector will have a strong year in 2017,” says NAHB Chief Economist Robert Dietz. “The multifamily sector has led the housing recovery and should continue to be supported by favorable demographics.”
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