Industry News

Builders see rising demand for rentals

Condo construction, conversion craze wanes

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Builder expectations for market-rate apartment units improved in the fourth quarter, as developers forecast growing demand for rentals following the condo construction and conversion exuberance of recent years, the National Association of Home Builders (NAHB) reported. According to the latest results of the NAHB's Multifamily Rental Market Index (MRMI), the index level reflecting builder expectations for market-rate rental starts is 69.5 -- nearly 18 points higher than 2005's fourth-quarter index. The scale for this index is from 0 to 100, with a rating of 50 generally indicating that the number of positive responses is about the same as the number of negative responses. "We are forecasting that the rental and for-sale sectors of the multifamily market will rebalance during the next two years, with about one-third of multifamily starts representing condos and nearly two-thirds representing rentals by the end of 2007," said David Seiders, NAHB's chief economist, in a stateme...