Survey: Apartment demand nears record high

Demographics suggest upward trend

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Apartment markets continue their upward trajectory, as fully 75 percent of the respondents to an industry survey reported tighter market conditions in the second quarter, measured by lower vacancy rates, higher rents or both. As a result, the National Multi Housing Council's July 2006 Quarterly Survey of Apartment Market Conditions Market Tightness Index increased slightly this quarter (May to July), to 85, now the second-highest index number on record. An index reading above 50 indicates that, on balance, conditions are improving; a reading below 50 indicates that conditions are worsening; and a reading of 50 indicates that conditions are unchanged. The Market Tightness Index has been 80 or above for five consecutive quarters, and above 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, during the peak of the recession. Despite improving market conditions, sales activity ...