Even With Sharp Decline, MFSI Remains Strong
During the month of August, the Multifamily Stock Index (MFSI) declined by 178 points, or just slightly more than 6.5%. Even with this large decrease, the MFSI remains at its second highest reading of all time, with the highest level set just last month. And it is still almost 23% higher than it was last year at this time. During the past month, the S&P 500 with dividends also fell, but by just slightly less than 1%, and is now almost 13% higher than it was 12 months ago. Because the MFSI decreased by so much more than the S&P 500 with dividends during August, the performance gap—or percentage difference—between the two indexes narrowed dramatically from 142% in July to 128% in August, which is just 14 percentage points lower than the high water mark of 142% set in last month, and is the third highest recorded difference in the history of this index.

Despite the very strong 50% rise in the S&P 500 since its low, set in late 2002, the MFSI has risen a staggering 76% during the same 35 months. In addition, the MFSI continues to dramatically outperform the S&P 500 over even longer time periods including the past three, four, five and six years. Since December 1998—the start point for this index—the MFSI has risen by 150% while the S&P 500 with dividends reinvested has gained a meager 9.8%. During the month of June, the price-to-earnings ratio (P/E) of the MFSI eased slightly to 17.81  while the dividend yield, defined as the total cash dividend payments divided by the current stock price, which moves in the opposite direction, rose and now stands at 5.52%.

The MFSI is an index of 27 publicly traded US headquartered firms, including 23 REITs, principally involved in multifamily ownership and management. [ return to top ]