Apartment and Condo Market Shows Continued Gains

NAHB’s Multifamily Production Index (MPI), released on June 7, reached its highest reading in more than six years in this year’s first quarter, at 51.

Palm Coast, FL – June 16, 2012 – NAHB’s Multifamily Production Index (MPI), released on June 7, reached its highest reading in more than six years in this year’s first quarter, at 51. The index, which measures builder and developer sentiment regarding current conditions in the multifamily market on a scale of 0 to 100, rose for a seventh consecutive quarter and was up from 49 in the final three months of last year. In the latest index, the component tracking builder and developer perceptions of market-rate rental properties recorded an all-time high of 69. The component focused on low-rent units dipped slightly to 53 and the component focused on for-sale units increased to 37, which is its highest reading since the final quarter of 2005.

Meanwhile, NAHB’s Multifamily Vacancy Index (MVI), which measures the multifamily housing industry’s perception of vacancies, dropped to a level of 31, the lowest recording since the inception of the index in 2003. With the MVI, lower numbers indicate fewer vacancies. The MVI has decreased considerably in the last three years after peaking at 70 in the second quarter of 2009. Commenting on the latest report, NAHB Chief Economist David Crowe said, “Multifamily construction continues to be a bright spot in the overall housing market. However, as indicated by the MVI, demand for apartments is now quite high, and production is still very low in a historic context and in the context of what we project is necessary to meet long-term demand.”

Source: National Association of Home Builders