The NAHB Multifamily Production Index (MPI) 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 all of
its components are scaled so that any number over 50 indicates that more
respondents report conditions are improving than report conditions are getting
worse.
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 “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 a significant 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, was essentially
unchanged, increasing one point to 38. With the MVI, lower numbers indicate
fewer vacancies.
Historically, the MPI and MVI have performed well as leading
indicators of U.S. Census figures for multifamily starts and vacancy rates,
providing information on likely movement in the Census figures one to three
quarters in advance.
Source: NAHB
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