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Multifamily Indexes Hold Steady Through the Third Quarter

By on Dec 07

Multifamily Housing IndexesThe most recent Multifamily Production Index (MPI) released by the National Association of Home Builders (NAHB) remained steady at an index level of 52, making this the third straight quarter with a reading above 50.

The MPI measures developer and building sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100. Any number over 50 indicates positive conditions. The index itself is a combined measurement of the market’s three key elements: construction of low-rent units, market-rate rental units and “for -sale” units.

The Multifamily Vacancy Index (MVI) dropped 3 points this quarter to 33. The MVI measures the multifamily housing industry’s perception of vacancies, and lower numbers indicate fewer vacancies. This index has been steadily declining since 2010.

“The multifamily market has recovered substantially since the end of 2010, and now stands at about 70 percent of the way back to a sustainable level. Our baseline forecast calls for further steady growth in the rate of multifamily production,” said NAHB Chief Economist David Crowe. “However, there are reasons for concern, especially at the affordable end of the rental apartment market, where builder confidence dropped dramatically in the third quarter. That was likely due to a specific provision of the Low-Income Housing Tax Credit set to expire at the end of the year. The prospect of dealing with this is making lower-rent projects difficult to underwrite. Ongoing deficit-reduction negotiations in Congress need to address this issue, or a serious shortage of affordable rental housing may develop.”

For more information on both indexes, visit For more information about the

National Association of Home Builders, visit their website.

Categories : News

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