As the market for new and resale homes continued its sluggish streak in many areas of the country, consumer demand for apartments grew for the 15th consecutive quarter, according to a recent survey.

The multifamily housing sector’s strong conditions continue to attract equity investors with the availability of equity capital for apartments also rising for the 15th consecutive quarter, according to the National Multi Housing Council’s April quarterly survey.

“The apartment markets continue to enjoy largely favorable conditions,” noted NMHC Chief Economist Mark Obrinsky. “Although both owners and managers are well aware of the ‘shadow rental market’ — condos and single-family homes originally intended for sale but being rented out instead — any supply spillover from the for-sale market has so far not exceeded the growing demand for apartment residences.”

One-third of respondents said that occupancy rates and/or rents rose during the first quarter of the year. As a result, the survey’s Market Tightness Index edged up slightly to 56. (For all four of the survey indexes, a 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.) In most markets, conditions were largely unchanged, according to 43 percent of respondents.

The long-term demographics favoring rental housing — namely the coming of age of the echo boomers and strong immigration level — make the sector a favorite among equity investors. Although the Equity Financing Index fell slightly to 53 from 56 in the last quarter, it was still the 15th straight over-50 reading. Equity capital for investment in apartments remains widely available as evidenced by the 71 percent of respondents who considered conditions unchanged compared to three months earlier.

A slight drop in the Debt Financing Index (to 54 in April from 56 in January) suggests that lenders may be tightening credit terms since interest rates are a bit lower than they were three months ago, according to NMHC. Even so, only 8 percent of respondents regarded debt finance conditions as worse now than three months earlier; the vast majority (70 percent) thought conditions were unchanged.

The one index that remains below 50 is the Sales Volume Index, which slipped to 38 from 41 in January and is the sixth straight sub-50 reading. With sales of apartment properties to condo converters essentially out of the picture now, the sub-50 reading suggests some modest slowing in sales to apartment buyers. Nevertheless, the share of respondents who noted higher sales compared with three months earlier grew slightly, to 13 percent in April from 10 percent in January.

Washington, D.C.-based NMHC is a national trade association for large apartment firms.

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