Apartment and Condo Housing Index Gains in Second QuarterAugust 28th, 2014 by Editor
The Multifamily Production Index (MPI), an indicator for the multifamily market released by the National Association of Home Builders (NAHB), posted a gain of five points to a reading of 58 for the second quarter. It is the 10th straight quarter with a reading of 50 or above.
The MPI measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100. The index and its components are scaled so that any number over 50 means more respondents report conditions are improving than report are getting worse. The MPI provides a composite measure of three key elements of the multifamily housing market: construction of market-rate rental units, low-rent units and “for-sale” units, or condominiums.
In the second quarter of 2014, the MPI component tracking builder and developer perceptions of market-rate rental properties had an increase of nine points to 68, which is the highest reading since the third quarter of 2012; low-rent units increased four points to 52; and for-sale units rose two points to 56.
The Multifamily Vacancy Index (MVI), which measures the multifamily housing industry’s perception of vacancies increased one point to 38. With the MVI, lower numbers indicate fewer vacancies.
“The MVI, the vacancy index, has been holding steady at a healthy level of 37 to 38 since late 2013,” says NAHB chief economist David Crowe. “Although this is slightly above the low vacancy numbers we saw in 2011 and 2012, those low numbers were the result of depressed production with few new apartments coming on line. Meanwhile, the strength of the MPI, the production index, in the second quarter is not surprising, given that we’ve seen employment improve, which allows younger consumers to form their own households.”
For data tables on the MPI and MVI, click here.