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Builder confidence in the multi-family housing market fell in the third quarter, driving the Multifamily Condo Market Index (MCMI) and the Multifamily Rental Market Index (MRMI) to their lowest levels since the National Association of Home Builders (NAHB) started them in 2003.
"We have a serious supply/demand imbalance in the housing market, coupled with a weakening job market, and stringent credit market conditions, and that is negatively impacting the multi-family sector," said David Seiders, NAHB's chief economist.
The component of the MRMI that measures supply was lower for market-rate and affordable apartments, at 22.2 and 15.7 respectively. In the 2007 third quarter, this component stood at 43.8 for market-rate and 44.3 for affordable apartments.
The MCMI fell to 8.1 for current conditions in the condominium market, down from 13.5 at the same period last year. Builder confidence in the condo market over the next six months fell from 20.8 in the third quarter of 2007 to 9.9 in the third quarter of this year.
The component tracking expectations for supply for market-rate apartments fell from 47.1 in the third quarter of last year to 19.1 in the third quarter of 2008. The component tracking the expectations of affordable housing developers for supply over the next six months fell to 20.3 in the third quarter, down from 39.1 in the same time a year ago.