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Digested from “Developers’ Sentiment About Multifamily Market Holds Steady in the Fourth Quarter”
National Association of Home Builders news release (2/26/15)
The National Association of Home Builders’ (NAHB) Multifamily Production Index (MPI) for the fourth quarter of 2014 was 54, the same as the previous quarter. An MPI above 50 indicates that more respondents feel that conditions are improving than getting worse. The MPI takes into account construction of low-rent units, market-rate units and condominiums. Also in the final quarter of 2014, the MPI for low-rent units increased by one point to 52, decreased by two points to 62 for market-rate units and stayed at 50 for condos.
The Multifamily Vacancy Index (MVI), which indicates the industry's perception of vacancies, decreased from 41 to 39 in the fourth quarter. The lower the MVI, the fewer the perceived vacancies.
According to NAHB, the MPI and MVI have consistently predicted U.S. Census data on multifamily starts and vacancy rates, which are released three to nine months later.
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