Washington — The Multifamily Production Index reached 54 in the third quarter, seven points lower than a spike in the second quarter but the seventh consecutive reading above 50.
The MPI measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100.
The index and all of its components are scaled so that any number over 50 indicates that more respondents report conditions are improving than report conditions are getting worse.
The MPI 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.
Although all three components fell from 2013 peaks in the second quarter, all remain above 50. The MPI component tracking builder and developer perceptions of market-rate rental properties dipped three points to 64, remaining above 50 for 12 straight quarters; while the components for low-rent and for-sale units declined from highs in the second quarter, both settled at 50.
“Multifamily developers remain positive about where the market is right now, despite the dip in the index,” said W. Dean Henry, chairman of NAHB’s Multifamily Leadership Board. “There are challenges still facing the industry such as availability of labor and rising cost of some building materials, but the demand for apartments and condos is strong enough for developers to proceed in most markets.”