The latest data from the National Association of Home Builders (NAHB) released shows that multifamily builder and developer sentiment is riding higher than it has in years.
According to the results from the newest Multifamily Production Index (MPI), sentiment has risen to 54 in the second quarter, up from 51 on a scale of 0 to 100 during the first quarter of 2012. Essentially, the higher the score, the better developers and builders feel about market conditions. This recent increase marks the highest level of confidence since the second quarter of 2005.
The MPI takes into account three specific areas of multifamily builder and developer sentiment—construction of low-rent units, market-rate units, and for-sale units. At the close of the second quarter, low-rent units were at an all-time high at 61. Market-rate faired just as well, coming in at 63. And for-sale units ranked at 41, the highest it’s been since the end of 2005.
Just like the MPI, the Multifamily Vacancy Index (MVI), measures how industry professionals view vacancies. But with the MVI, the lower the score the better. A lower score means fewer vacancies. After reaching its peak at 70 in 2009, it has settled down to 36.
In the single-family market, optimism is improving, but still not running quite as high as multifamily. The NAHB / Wells Fargo Housing Market Index (HMI) reveals that things are slowly improving as confidence in new sales and sales expectations in single-family inched up from 35 to 37, month-over-month, in August.