Builders are becoming more positive about the U.S. condominium and apartment markets, according to the National Association of Home Builder's (NAHB) quarterly housing index.
The Multifamily Production Index (MPI), a quarterly housing report by NAHB that gauges builder sentiment and market factors in the apartments and condominiums sector, was up five points to 58 in the second quarter of 2014.
The index gauges sentiment on a scale of 0 to 100 and any number above 50 reflects a positive trend and growth in the market. This is the tenth consecutive increase where the reading was above 50.
"We have seen steady growth for the apartment market since 2011," W. Dean Henry, chairman of NAHB's Multifamily Leadership Board, said in a statement.
Henry added that the trend shall continue in the near future, but a deficit in construction workers and labor is proving to be a hindrance.
The NAHB housing report also found that the Multifamily Vacancy Index (MVI) remained hardly changed this quarter, increasing one point to 38. The MVI level has been hovering around 37 to 38 since 2011 and experts say this is a good sign.
"Although this is slightly above the low vacancy numbers we saw in 2011 and 2012, those low numbers were the result of depressed production with few new apartments coming on line. Meanwhile, the strength of the MPI, the production index, in the second quarter is not surprising, given that we've seen employment improve, which allows younger consumers to form their own households," David Crowe, chief economist at NAHB, added in the statement.
Renting has indeed become a more attractive and feasible option than buying. The NAHB report supports the recent report released by the U.S. Commerce Department which claimed that the pace of new-home sales declined to a four-month low in July.
"It's a little bit disappointing," Thomas Simons, an economist at Jefferies LLC, told Bloomberg in an interview after the report was released. "The new-home sales data have no traction whatsoever and don't seem to be gaining at all."
People aren't ready to make a commitment of buying a home yet even if renting costs them more than buying.
"It's just a different mind-set. They don't want to own. They don't want the hassle. But they're paying $3,000 a month for an apartment and they could easily buy a condo for that," Travis Ruff, a realtor with Coldwell Banker, told the Los Angeles Times.
However, some experts say that the gap between renting and buying will narrow down soon, especially as the economy rebounds slowly yet steadily.
