Expect a strong year for new multifamily properties in 2017, the National Association of Home Builders reported.
The newest Multifamily Production Index climbed three points in the third quarter to 53. A measure of 50 or higher indicates conditions are improving. The index often serves as a leading industry indicator.
“This quarter’s MPI reading is consistent with our projection that the multifamily housing sector will have a strong year in 2017,” said Robert Dietz, NAHB Chief Economist. “The multifamily sector has led the housing recovery and should continue to be supported by favorable demographics.”
Condominium development had the strongest index measure (59) while market-rate units (57) and low-rent units (54) were also in good shape.
Meanwhile, NAHB’s Vacancy Index was 42, which represents fewer vacancies.
“Overall, multifamily developers remain positive about the market,” said Andrew Chaban, CEO of Princeton Properties in Lowell, Massachusetts and chairman of NAHB’s Multifamily Council. “However, in some areas of the country developers have to overcome challenges of labor and lot shortages to meet demand.”