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The multifamily market took a slight dent in confidence as the National Association of Home Builders (NAHB) reported its Multifamily Production Index (MPI) dropped three points during the second quarter to a reading of 50.
The three primary components within the MPI, which covers a zero-to-100 scale, experienced respective declines: Component measuring low-rent units dipped two points to 52, the market-rate rental units component tripped down five points to a level of 53 and the component covering for-sale units fell three points to 45.
The NAHB’s Multifamily Vacancy Index, however, upticked by three points to a level of 42 for the second quarter, which suggested more vacancies are coming to the market.
“The slight drop in this quarter’s Multifamily Production Index is consistent with the NAHB forecast of a leveling off of multifamily production after multiple years of strong growth rates,” said NAHB Chief Economist Robert Dietz. “Nonetheless, we expect multifamily development to remain at above normal levels as demographics remain favorable and the market seeks a balance between supply and demand.”