WASHINGTON—The National Association of Home Builders (NAHB) released the Multifamily Production Index (MPI) and Multifamily Vacancy Index (MVI) for the fourth quarter of 2012. Historically, the MPI and MVI have served as leading indicators of the U.S. Census figures for multifamily starts and vacancy rates, which can then be used to suggest Census figures one to three quarters in advance. The current figures led the NAHB to expect a 30 percent increase in multifamily starts in 2013.
The fourth straight quarter of the MPI being above 50 on the scale, with a number of 54 for the fourth quarter of 2012, has contributed to the continued improvement of the apartment and condominium market. Three key elements that help provide a composite measure of the multifamily housing market for the MPI are builder and developer perceptions of construction of low-rent units, market-rate rental units and “for sale” units or condominiums.
Similarly, the MVI dropped two points, to a 31, for the fourth quarter of 2012. These lowered numbers, beyond indicating fewer vacancies, reiterate the consistency of low levels throughout 2011 and 2012.
Despite the positives from both the MPI and MVI, there are a few issues that may face builders and developers in 2013. An inability to keep up with the demand of the multifamily market could be caused by the rising cost of building materials, labor shortages and the price of land.
For more information or to see the data tables for both the MPI and MVI, visit the NAHB website here.