Multifamily Confidence Slid in Q4

Washington, DC, February 26, 2021-Confidence in the market for new multifamily housing declined in Q4 2020, according to results from the Multifamily Market Survey (MMS) released by the National Association of Home Builders (NAHB). The MMS produces two separate indices. The Multifamily Production Index (MPI) fell five points to 43 compared to the previous quarter. Meanwhile, the Multifamily Vacancy Index (MVI) decreased two points to 42, with smaller numbers indicating fewer vacancies.

The MPI measures builder and developer sentiment about current conditions in the apartment and condo market on a scale of 0 to 100. The index and all of its components are scaled so that a number below 50 indicates that more respondents report conditions are getting worse than report conditions are improving.

The MPI is a weighted average of three key elements of the multifamily housing market: construction of low-rent units-apartments that are supported by low-income tax credits or other government subsidy programs; market-rate rental units-apartments that are built to be rented at the price the market will hold; and for-sale units-condominiums. All three components decreased in the fourth quarter: the component measuring low-rent units dropped four points to 42, the component measuring market rate rental units decreased five points to 48 and the component measuring for-sale units fell seven points to 39.