The Multifamily Production Index (MPI), released on November 19, by the National Association of Home Builders (NAHB), increased one point to a level of 56 for the third quarter of 2015. This is the 15th consecutive quarter with a reading of 50 or above.
The MPI measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100. The index and all of its components are scaled so that any number over 50 indicates that more respondents report conditions are improving than report conditions are getting worse.
The MPI provides a composite measure of three key elements of the multifamily housing market: construction of low-rent units, market-rate rental units and “for-sale" units, or condominiums. The MPI component tracking low-rent units increased one point to 55 and market-rate rental units rose four points to 64 while for-sale units dropped three points to 50.
The Multifamily Vacancy Index (MVI), which measures the multifamily housing industry's perception of vacancies, increased five points to 39, with higher numbers indicating more vacancies. After peaking at 70 in the second quarter of 2009, the MVI improved consistently through 2010 and has been fairly stable since 2011.
Historically, the MPI and MVI have performed well as leading indicators of U.S. Census figures for multifamily starts and vacancy rates, providing information on likely movement in the Census figures one to three quarters in advance.