The Multifamily Production Index (MPI), a statistic compiled by the National Association of Home Builders (NAHB) that measures multifamily unit construction, increased for the fourth consecutive quarter, another sign that the multifamily market is improving.
For the second quarter, the MPI rose to 44.4 from the first quarter’s 41.7. It is the highest index score since 2006, and a dramatic increase from the third quarter 2008 low of 16.0.
“Multifamily rental construction is trending upward, and it is definitely the brightest sector in the broader housing market,” said NAHB Chief Economist David Crowe.
The purpose of the index is to measure the industry attitudes on three construction sectors of multifamily housing: low-rent units, market-rate-rent units, and “for sale” units. An index of more than 50 indicates that more conditions in the market are improving than weakening.
Along with the MPI, the NAHB also released its Multifamily Vacancy Index (MVI), which measures the industry’s take on vacancies in multifamily properties. For the second quarter, the MVI increased slightly from 35.0 to 36.1. Though a lower MVI signals fewer perceived vacancies, Crowe pointed out that the last three quarters, the MVI is the lowest it has been since the second quarter of 2007.