WASHINGTON – The National Association of Home Builders’ (NAHB) Multifamily Production Index (MPI) indicated a slight decline as the index decreased four points to 50 in the fourth quarter of 2013.
However, the MPI which tracks builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100, maintained a level of 50 or more for the eigth consecutive quarter.
"Multifamily developers are still seeing demand for apartments, as the MVI shows," said W. Dean Henry, CEO of Legacy Partners Residential in Foster City, CA, and chairman of NAHB's Multifamily Leadership Board. "However, the cost and availability of labor is putting pressure on the ability to bring new units online."
The MPI offers a combined measure of three elements of the multifamily housing market: construction of low-rent units, market-rate rental and for-sale units, and condominiums. The MPI sector measuring builder and developer perceptions of market-rate rental properties has been the strongest of the components, but dipped four points in the fourth quarter to 60. The sector for low-rent units fell three points to 47 and for-sale units dipped four points to 46.
The Multifamily Vacancy Index (MVI), which tracks the multifamily housing industry's perception of vacancies, dropped two points to 38, with lower numbers indicating fewer vacancies.
"This quarter's MPI results are in line with NAHB's forecast that calls for increased production of new apartments in 2014, but at a slower pace than last year," said NAHB Chief Economist David Crowe. "The results are also in line with recent downturns in other economic indicators, due to unusually severe weather in parts of the country that disrupted supply chains and affected confidence in several sectors of the economy."
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