Multifamily Builders Bearish on Condos

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WASHINGTON, DC-Multifamily builders are becoming less optimistic about condo projects, according to the latest results of the National Association of Home Builders/Fannie Mae Multifamily Housing Market Index. It finds that more investors pull out and rising interest rates price some buyers out of the market. Conversely, however, these same factors are leading to a resurgence of interest in the apartment market, the index also found.

Supply-demand dynamics are another factor in favor of apartment development right now, the association also notes. “The rental market is very good right now,” says Leonard Wood, chairman of NAHB’s Multifamily Leadership Board. “Over the past three years, there have been thousands of rental units converted and sold as condos and, at the same time, few new rental apartments were being built. This leaves us with a supply-constrained market while demand is growing.”