For all the apartment owners who think single family is going to stay down and let multifamily enjoy its reign forever, consider yourselves warned. Because while apartment fundamentals remain strong for the forseeable future, homebuilders are growing more and more confident that single-family demand is on its way back.
The latest data released today by the National Association of Home Builders (NAHB) tracking builder confidence points to continued bullishness on the single-family market. The NAHB/Wells Fargo Housing Market Index—which measures builder’s perceptions of current single-family home sales and expectations for the upcoming six months—has increased in August for the fourth consecutive month and is now at its highest level since February 2007.
The index shows that the most confidence comes from the Midwest and the South, while Western and Northeastern regions registered modest declines. But multifamily owners and operators shouldn’t be too concerned with the news.
According to NAHB Chief Economist David Crowe, builders aren’t celebrating a single-family recovery just yet.
“We are still at a very fragile stage of this process and builders continue to express frustration regarding the inventory of distressed properties, inaccurate appraisal values, and the difficulty of accessing credit for both building and buying homes,” says Crowe.