Multi-Family Housing Continues To Improve

Washington, DC, Dec. 9, 2011 -- The Multifamily Production Index, a leading indicator for the multifamily market, showed continued improvement for the fifth consecutive quarter for the apartment and condominium housing market.

The MPI, created by the National Association of Home Builders,tracks the sentiment of builders and developers about the conditions of the multifamily market on a scale of 0 to 100.

The reading increased from 44.4 in the second quarter to 47.3 in the third quarter — the highest reading since the fourth quarter of 2005.

The index provides a composite measure of three key elements of the multifamily housing market: construction of low-rent units, market-rate rental units and "for-sale" units, or condominiums.

The index is scaled so that any number over 50 indicates that more respondents report conditions are improving than report conditions are getting worse.

In the third quarter of 2011, the MPI component tracking builder and developer perceptions of market-rate rental properties recorded an all-time high of 63.8, while low-rent units remained steady at 50.1. For-sale units rose to 31.9, the highest recording since the second quarter of 2006.

"Multifamily construction continues to be the bright spot in the overall housing market," said David Crowe, chief economist, NAHB. "While household formations have been below trend, those who are forming new households are becoming renters and this trend is likely to continue until consumers' confidence returns."