McLEAN, VA—The multifamily asset class has been riding high foryears but increasingly in some quarters this particularly glass islooking half empty. Sooner or later, it is thought, the robustpipeline will over take demand. The other side of this argument hasbeen that demand will continue to meet and exceed whatever thesupply side can throw at it. New figures from Freddie Mac givecredence to the optimists. It notes that construction of apartmentbuildings has hit the highest monthly pace since the beginning of2006. Absorption rates, though, are matching that pace.

The latest absorption rates for unsubsidized, unfurnished newlybuilt apartments have been at the fastest pace in a decade: TheCensus Bureau reported that the latest 3-month and 6-monthabsorption rates had risen to 64% and 83%, respectively. In short,demand exists to absorb the new supply.

Currently "one out of three residents in the US is a renter,"says Frank Nothaft, Freddie Mac vice president andchief economist, in a videopresentation on this month's housing outlook.