Moody's tempers multifamily bubble fears

The Housing Wire reports:

More than 34% of the national housing stock is being rented and the percentage is climbing, according to Moody's Analytics.

Slow income growth coming out of the recession and a lack of savings for a down payment pushed rental demand higher. Vacancy rates, according to Moody's, dropped for all types of properties during 2011. But for multifamily units of five or more, vacancies plunged below 10.5% from a high of 12.5% at the beginning of 2010.

To meet the escalating demand, construction starts on multifamily properties averaged 221,000 multifamily units from February to April, up from an average of 67,000 at the end of 2009. Many of the construction crews laid off after the housing bust are migrating to multifamily projects, though unemployment in the sector remains difficult.

Multifamily properties escaped overbuilding in the boom, but now some fear a bubble may be forming. Moody's analysts said the fear is "misplaced."

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