Photo: Doug Kerr/Flickr
During the third quarter of 2016, builder and developer positive sentiment towards the US multifamily housing market recorded gains. Overall sentiment has remained consistently positive since early 2012, according to new data released yesterday by the National Association of Home Builders (NAHB).
The Multifamily Production Index (MPI) developed by the NAHB measures builder and developer sentiment on conditions in the apartment and condo market on a scale of 0 to 100. The MPI is scaled so that a number of above 50 indicates that more respondents report conditions are improving than getting worse.
The MPI recorded a gain of 3 points from the previous quarter, rising to 53 points in the third quarter 2016. NAHB data says the MPI has held at 50 or higher since the beginning of 2012.
According to the NAHB, the MPI provides a composite measure of three key elements of the multifamily housing market — construction of low-rent units, market-rate rental units and condos. During the third quarter of 2016, all three components recorded gains. Low-rent units rose to 54 points, up two points from the previous quarter. Market-rate rental units recorded a gain of 4 points from the previous quarter, rising to 57 in the third quarter. While condos rose to 59 points, also up 4 points from the previous quarter.
The multifamily vacancy rate remained at 42 in the third quarter, unchanged from the previous quarter. The Multifamily Vacancy Index (MVI) measures the housing industry’s perception of vacancies, and lower numbers indicate fewer vacancies. The MVI has been consistently improving following a peak of 70 in the second quarter of 2009.
“This quarter’s MPI reading is consistent with our projection that the multifamily housing sector will have a strong year in 2017,” said NAHB Chief Economist Robert Dietz. “The multifamily sector has led the housing recovery and should continue to be supported by favorable demographics.”
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