Commentary and Data Supplied by Bernard Markstein, Director of Forecasting, National Association of Home BuildersMultifamily StartsStarts in buildings with five or more apartments plunged to their lowest rate on record in April — a seasonally adjusted annual rate of only 78,00 units. This is down 42 percent from March, and down nearly 75 percent year over year. Although it’s generally wise to exercise caution when attempting to gauge market conditions based on a single month of data, the weakness of a number as low as 78,000 is difficult to overstate. Reversing this trend would require the return of lenders to the multifamily construction market.CPI vs Rent The rate of increases in the Consumer Price Index on a year-over-year basis continues to drop, as it has virtually every month since last August. In April, the index stood almost 1 percent lower than it did at the same time a year ago. The rate of increase for the portion of the index that reflects rents also has been dropping since then, as increasing foreclosures-turned-rentals entered the market, depressing rental rates. Nonetheless, the rental index still is up 3.1 percent from a year ago, clearly outstripping the rate of increase in general inflation. It also is greater than the increase in “core” inflation (the Consumer Price Index) of 1.9 percent.Building MaterialsGypsum board year-over-year prices have risen every month since last August, recovering ground lost in 2007-2008, when price drops in the 10-20 percent range were often the norm. While cement prices have shown small fluctuations, they are now at exactly the same level as they were last year at this time. Softwood lumber prices continue to fall — this April the price was about 11 percent lower than it was last April, a time when it was 12 percent lower than the previous April. And plywood prices have dropped more than 7 percent since last year at this time.NAHB ForecastThe sharpest contraction in economic output during the current recession apparently occurred in the final quarter of last year, as real GDP contracted at an annual rate of 6.3 percent. In the second quarter, NAHB is currently estimating a 1.2 percent rate of contraction, as the fiscal stimulus program adds about 2 percentage points to growth and as business fixed investment contracts at a slower pace than in the first quarter. NAHB continues to believe that GDP growth will swing into the black in the second half of this year, aided by the fiscal stimulus program and the financial market policy blitz engineered by the Federal Reserve, Congress and the Administration. Condo PricesThe median condo price rose slightly in April, as buyers began to return to the market, attracted by a combination of low prices and low interest rates. The bump in prices might be a fluke, or it might reflect a market for nicer, somewhat higher-priced units, as the makeup of the buying public shifts from investors to potential residents. Despite this monthly increase, the median price for existing condo sales is down 18.5 percent from a year ago. Prices year-over-year have been dropping in a range between 18 and 22.5 percent for the last five months.