Confidence among developers of multifamily housing units is soaring, according to survey results released Thursday by the ""National Association of Home Builders (NAHB)."":http://www.nahb.org/default.aspx[IMAGE]
""Multifamily developer confidence is currently at an all-time high according to our survey results, and we expect to see that continue for the foreseeable future,"" said W. Dean Henry, chairman of NAHB's Multifamily Leadership Board and CEO of Legacy Partners Residential in Foster City, California.
NAHB's Multifamily Production Index rose nine points over the second quarter of this year, reaching its highest rating on record--61.
NAHB measures confidence on a scale of 0 to 100 with any score higher than 50 signifying that more than half of survey respondents believe conditions for multifamily developers are improving.[COLUMN_BREAK]
NAHB measures confidence in regards to three components--construction of low-rent units, market-rate rental units, and ""for-sale"" units or condos. Confidence in all three areas rose in the second quarter.
The greatest uptick in confidence occurred in regards to for-sale units. Confidence in this indicator increased 16 points in the second quarter, bringing it to its highest level since 2005, a score of 58.
Confidence in market rate rental properties jumped 6 points to 67 in the second quarter, marking the 11th consecutive quarter this component has scored higher than 50.
Sentiment toward low-rent units rose five points to 60 over the quarter.
""The apartment and condo sector continues to expand production,"" said David Crowe, chief economist at NAHB.
Both Crowe and Henry report rising demand, especially among young buyers.
""Much of the consumer demand that we are now seeing is coming from a large generation of young people who are able to find jobs and establish their own households as the economy continues to improve,"" Henry said.
Industry participants reported rising multifamily housing vacancies in the second quarter. However, the rate has been ""at a fairly moderate level since 2011,"" according to NAHB.
This index peaked at 70 in the second quarter of 2009 and stands at 42 today.