Multifamily Construction Sentiment Declines in Second Quarter
Confidence in the market for new multifamily housing decreased in the second quarter, according to results from the Multifamily Market Survey (MMS) released today by NAHB. The MMS produces two separate indices. The Multifamily Production Index (MPI) dropped three points to 48 compared to the previous quarter. Meanwhile, the Multifamily Occupancy Index (MOI) increased six points to 70.
The MPI measures builder and developer sentiment about current conditions in the apartment and condo market on a scale of 0 to 100. The index and all of its components are scaled so that a number below 50 indicates that more respondents report conditions are getting worse than report conditions are improving.
The MPI is a weighted average of three key elements of the multifamily housing market:
- Construction of low-rent units-apartments that are supported by low-income tax credits or other government subsidy programs;
- Market-rate rental units-apartments that are built to be rented at the price the market will hold; and
- For-sale units—condominiums.