Investor Confidence in Multifamily Market Soars
Buoyed by a positive outlook for the rental apartment market, investors’ confidence soared last month in publicly held firms whose primary business involves apartments and condos, according to the latest Multifamily Stock Index (MFSI), which was released last month by NAHB.
“A good economy that is creating jobs is good for the rental apartment market,” said David Seiders, NAHB’s chief economist, who added that the multifamily rental market is also benefiting from a tight supply.
“In the past two years, so many apartments were converted to condominiums that the number of units in the rental pool significantly decreased in places like Florida and California,” he said. “So while there is softness in the condo market right now, multifamily housing in general is still an attractive asset class compared to other types of investments.”
In October, the MFSI gained 277 points — an 8% increase — to reach an index value of 3,648, up from 3,371 for the prior month and more than 44% higher than a year earlier. This was a record high for the index, which tracks the stocks of 24 publicly traded firms, including 20 Real Estate Investment Trusts (REITs) principally involved in owning, developing and managing multifamily housing.
NAHB benchmarks its multifamily stock index against the S&P 500 with dividends reinvested. During October, the value of the S&P 500 with dividends reinvested also increased, gaining 3.25% to reach an index value 17% higher than a year earlier.
For more information, e-mail Ann Marie Moriarty at NAHB, or call her at 800-368-5242 x8350.
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