Hardware Retailing The Industry's Source for Insights and Information
Confidence in the market for multifamily housing increased year over year in the third quarter, according to the Multifamily Market Survey (MMS) released by the National Association of Home Builders (NAHB).
The Multifamily Production Index (MPI) had a reading of 46, up six points year over year while the Multifamily Occupancy Index (MOI) had a reading of 74, down one point year over year.
The MPI measures builder and developer sentiment about current production conditions in the apartment and condo market on a scale of 0 to 100. The MPI is a weighted average of four key market segments: three in the built-for-rent market (garden/low-rise, mid/high-rise and subsidized) and one in the built-for-sale (or condominium) market. The component measuring garden/low-rise increased three points to 51, the component measuring mid/high-rise units increased nine points to 37, the component measuring subsidized units rose nine points to 55 and the component measuring built-for-sale units posted a six-point gain to 35.
“We are seeing a degree of bifurcation in the multifamily market, as developers of low-rise market-rate and subsidized rental properties express increased optimism, while developers of mid- and high-rise properties and condominiums remain less confident,” says Debra Guerrero, senior vice president of strategic partnerships and government affairs at The NRP Group in San Antonio and chairman of NAHB’s Multifamily Council. “Significant challenges such as the current regulatory environment, rising construction costs and difficulties in securing project financing continue to affect the multifamily sector as a whole.”
The MOI measures the multifamily housing industry’s perception of occupancies in existing apartments on a scale of 0 to 100. The MOI is a weighted average of three built-for-rent market segments (garden/low-rise, mid/high-rise and subsidized). The component measuring garden/low-rise units dipped one point to 76, the component measuring mid/high-rise units held steady at 66 and the component measuring subsidized units dropped five points to 81.
