The national apartment market had a lackluster first quarter, but one positive trend did emerge: The number of residents leaving apartments to buy homes is on the decline.

However, the critical factor is employment. "It’s all about jobs. Demand for apartment residences remains below normal levels in most metro areas and is likely to stay that way until we see a sustained pickup in employment," says Mark Obrinsky, chief economist at the National Multi Housing Council (NMHC).

Twenty percent of respondents to NMHC’s latest quarterly survey of apartment market conditions report that the pace of residents leaving the apartment market to buy homes is slowing.

In addition, the Market Tightness Index, which captures rent increases and vacancy changes, rose slightly to 32, up from January's index of 29. A Market Tightness Index of less than 50 indicates that market conditions are getting looser. The Market Tightness Index has hovered around 30 since hitting a record low of 4 in January 2002.

Also, sales volume remains steady, with the Sales Volume Index rising to 48 from 41 in January, but below the 58 recorded in October 2002. A Sales Volume Index of less than 50 indicates the volume of sales decreased in more markets than it increased. Financing conditions improved marginally from already-strong levels. More than a quarter of respondents said debt financing (mortgage rates and borrowing terms) had improved. Almost 60% of respondents deemed equity financing conditions unchanged; slightly more indicated improved conditions (17%) than worsened (15%).