National apartment, condo market ends fourth quarter positively

​​​WASHINGTON, D.C. – ​​​The National Association of Home Builders’ (NAHB) Multifamily Production Index (MPI) rose seven points to 53 in fourth quarter 2017.

​The MPI measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of zero to 100. A number above ​​​​50 indicates a net positive outlook.​​

All three key elements of the MPI rose in the fourth​ quarter. Construction of low-rent units rose two points to 56. Market-rate rental units climbed 11 points to 54, and for-sale units increased nine points to 49.

The Multifamily Vacancy Index (MVI), which measures the industry’s perception of vacancies, remained even at 41. Lower numbers indicate fewer vacancies. The MVI has been fairly stable since 2013 after peaking at 70 in second quarter 2009.

“Multifamily developers continue to see solid demand in many parts of the country,” said Steven Lawson, chairman of NAHB’s multifamily council. “However, developers need to be careful to manage costs as prices of land, labor, and some building materials continue to rise."

“The positive MPI reading is consistent with builder sentiment readings in other segments of the housing industry,” said NAHB Chief Economist ​Robert Dietz. "Continued job growth and increasing household formation are key drivers for the multifamily market moving forward.”​