The Multifamily Market Survey from the National Association of Home Builders shows builder and developer sentiment is on the rise, as is occupancy.
The rental housing industry is preparing for a positive outlook the remainder of the year. The latest Multifamily Market Survey from the National Association of Home Builders (NAHB) found that both multifamily indices—the Multifamily Production Index (MPI) and the Multifamily Occupancy Index (MOI)—increased during the third quarter of 2021.
The MPI jumped five points to a reading of 53, while the MOI increased five points to 75, which is the highest level since the index began in 2003.
The MPI measures builder and developer sentiment on a 0 to 100 scale with anything over 50 indicating improving conditions. The three factors the MPI gages are affordable housing, market rate apartment homes and for-sale condominiums. All three factors improved in Q3—low-rent units increased six points to 55, and market rate rentals jumped nine points to 60. For-sale units inched forward two points to 47.
The MOI measures occupancies for existing apartments in Class A, B and C communities, and a reading of 50 or higher indicates increased occupancy.
“The record-level MOI is consistent with the strong multifamily occupancy rates reported by the Census Bureau, which are now higher than they’ve been since the 1980s,” said NAHB Chief Economist Robert Dietz in a release. “And an MPI back above 50 is consistent with multifamily housing starts, which have been running at a 460,000-plus annualized rate through the first three quarters of 2021 — which should make 2021 the strongest year for multifamily production that we’ve seen since the tax policy-driven surge of the 1980s. As the economy continues to reopen, housing demand is rising in higher density markets, supporting both multifamily occupancy and production.”