High demand, happy builders sum up rental market

Rising interest from prospective renters boosts confidence

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With demand on the rise and supply still tight, builder confidence in current rental apartment market conditions jumped in the third quarter of 2006, and their expectations for the next six months are even higher, according to the latest results of the National Association of Home Builders'/Fannie Mae Multifamily Rental Market Index (MRMI). "Good economic conditions -- particularly growth in the job market -- are driving demand in the rental apartment market," said NAHB Chief Economist David Seiders. "But the rental market is also benefiting from a tight supply. For-sale condo units have accounted for a large share of multifamily housing starts over the last few years at the same time a sizeable number of apartment units were being converted to condos." The component of the MRMI that tracks current demand rose during the third quarter for all classes of apartments, with moderately priced (class B) apartments seeing the largest increase, reaching 66, up from 58.5 at the same time las...