The National Association of Home Builders (NAHB) has announced that its Multifamily Production Index (MPI) has recorded its highest reading since the third quarter of 2005 with an index level of 51.
The MPI, which measures builder and developer sentiment about current conditions in the multifamily market on a scale of 0 to 100, rose from 49 in the fourth quarter of last year to 51 in the first quarter. This is the seventh consecutive quarter that the index has increased, according to the NAHB, which adds the MPI component tracking builder and developer perceptions of market-rate rental properties recorded an all-time high of 69 in the first quarter, while low-rent units dipped slightly to 53. For-sale units increased to 37, which is the highest reading for this component since the fourth quarter of 2005.
Separately, the NAHB's Multifamily Vacancy Index (MVI) dropped to a level of 31, the lowest recording since the inception of the index in 2003. The MVI has decreased considerably in the last three years, after peaking at 70 in the second quarter of 2009.
‘In spite of continuing difficulties in the capital markets, it appears that new construction is under way,’ says W. Dean Henry, president of Legacy Partners Residential in Foster City, Calif., and chairman of NAHB's Multifamily Leadership Board. ‘This is certain to help satisfy some of the pent-up demand that has occurred over the past several years.’