Industry officials had expected the situation to look up following September's inclement weather, but the large jump in percentage points came as a welcomed surprise. The new figure constitutes the largest increase in starts since December of last year.

"Excellent financing conditions are still the key to solid housing market performance, including much of the strength on the condo side of the multifamily market," notes David Seiders, chief economist for the National Association of Home Builders. "Improving economic conditions, particularly job and income growth, are additional factors in housing's favor heading forward."

While multifamily starts were on the rise across the country, activity was particularly abundant in the Northeast where multifamily housing starts escalated by 20%. In the Midwest, the starts increased by 8.6%, and in the West and the South, the numbers went up 5% and 4%, respectively. The additional units getting underway will accommodate significant current, and impending, demand in selected markets.

"Vacancy rates have peaked in most markets and are set to decline in the year ahead, thanks to rising employment and interest rates," Marcus & Millichap researchers conclude in their 2004 National Apartment Report. According to the report, the relentless drain of jobs over the past three years has created pent-up demand for rental units, especially among recent college graduates and the unemployed. An estimated four million adults aged 25 to 34 currently reside in their family's home. Many of these potential renters have been forced to move back with their parents or double-up with other renters to conserve cash, but as employment conditions improve, they will begin to create separate households, resulting in "a significant expansion in tenant demand."