Based on the latest results of the National Association of Home Builders' Multifamily Market Survey, US builder confidence for new multifamily housing improved in the second quarter of 2019.

The Multifamily Production Index (MPI) increased 16 points to 56 compared to the previous quarter. Meanwhile, and the Multifamily Vacancy Index (MVI) fell eight points to 40, with lower numbers.

The MPI is a weighted average of three components of the multi-family housing market: low-rent housing units, which are subsidized by low-income; market-rate rental units - apartments that are built to the market the market will hold; and for-sale units - condominiums. All items in the second quarter: The component measuring low-rent units increased to 22 points to 64, and the component measuring the price of 22 points to 64 and the component measuring for-sale units rose 19 points to 50.

The MVI measures the multifamily housing industry's perception of vacancies in existing apartments. It is a weighted average of current occupancy indexes for class A, B, and C multifamily units, and can vary from 0 to 100, where a number under 50 With a reading of 40, this is the lowest reading since the second quarter of 2017.

"Overall, builders and developers are reporting increased confidence in the multifamily housing market," said Gary Campbell, CEO of Gilbert G. Campbell's Real Estate in Lowell, Mass., And chairman of NAHB's Multifamily Council. "However, they still have to deal with the high cost of land, labor and regulation, which could impact future production."

"Historically, the MPI and MVI tend to move ahead, but in the second quarter we see positive gains in both the NAHB and Census measures at the same time," said NAHB Chief Economist Robert Dietz. "This is a sign of solid demand for multifamily housing in the second quarter, which is supported by a low unemployment and a healthy number of household formations."

Source by World Property Journal - Residential News »Miami Edition | By Michael Gerrity | August 27, 2019.