Will the homebuyer tax credit will boost apartment demand.

With the end of the homebuyer tax credit will suppress home sales in the second half, favorable housing affordability. Expiration of the homebuyer tax credit will boost apartment demand in the second half of the year as the number of individuals leaping into ownership subsides. Slower but continued job creation also will deepen the rental pool, largely driven by the “de-bundling” of households merged during the height of the recession. The national labor market is projected to increase by 1.3 million jobs this year, or 1 percent, and with apartment construction expected to hit a 15-year low, the apartment sector will post notable occupancy gains in the second half. Vacancy will finish the year at 7.4 percent, down 60 basis points from 2009 and the first annual improvement in two years.

Low mortgage rates have encouraged many households to refinance, helping strengthen their financial positions and supporting greater discretionary spending. Refinance applications have increased as mortgage rates have fallen and now account for 82 percent of mortgage applications. For some, these trends have raised household discretionary income and will likely positively impact retail sales. This more positive outlook will lead to greater stability through the remainder of the year, with the vacancy rate anticipated to rise just 40 basis points in the second half to 10.4 percent. Now is a great time to buy.