Multifamily Survey Data Indicate Market Improvement

Today, NAHB released two multifamily indices that point toward healthier market conditions for both new and existing apartment and condo buildings.

The Multifamily Production Index (MPI), which tracks developer sentiment regarding new construction on a scale of 1 to 100, is at 40.8 – up more than 5 full points since the previous quarter and the highest reporting since the fourth quarter of 2006. The index is scaled so that any reading over 50 indicates more respondents report conditions are improving than report conditions are getting worse.

The Multifamily Vacancy Index (MVI) also showed improvement, declining to 33.3, which is the smallest number since the third quarter of 2006 – and half of what it was a year and a half ago. Smaller numbers indicate fewer vacancies.

“The renewed optimism evident in this index indicates that developers are beginning to increase production in order to meet pent-up demand,” said NAHB Chief Economist David Crowe.  “However, the lack of construction financing constrains their ability to do so at levels sufficient to meet that demand.”

To see the Fourth Quarter 2010 MMI results, visit

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