The Multifamily Market Survey (MMS) is based on a quarterly survey of NAHB multifamily builders and property managers. The survey is designed to monitor conditions for multifamily production (starts) and multifamily rental occupancy in the current versus preceding quarter as well as in the next six months.
Confidence in the multifamily housing market weakened in the third quarter, according to the Multifamily Production Index (MPI). The MPI dropped three points to 48 compared to the previous quarter. The Multifamily Vacancy Index (MVI), which measures the multifamily housing industry's perception of vacancies, rose two points to 47.
Respondents are asked to rate new production of units for sale and for rent—both low-rent and market-rate—as “stronger,” “same” or “weaker.” Occupancy in rental Class A, Class B and Class C units is rated using a similar scale—“higher,” “same,” or “lower.”
Using those responses, two summary indexes are calculated: Multifamily Production Index (MPI) and the Multifamily Vacancy Index (MVI).
The MPI is a weighted average of current production indexes for low-rent, market-rent and for-sale units, and can vary from 0 to 100, where any number over 50 indicates more builders report stronger rather than weaker conditions.
The MVI is 100 minus a weighted average of current occupancy indexes for class A, B, and C units, and can also vary from 0 to 100, where any number over 50 indicates more property managers report negative conditions (more vacant apartments).
The formulas for the summary indexes were chosen based on correlations between the various component indexes and measures of multifamily production and vacancy published by the U.S. Census Bureau.