The stocks of publicly traded companies whose business is primarily the development and ownership of multifamily housing bounced back strongly in September, after taking a dip in August, pushing the National Association of Home Builders Multifamily Stock Index to its second-highest level ever.
“The demand for condominiums remains strong and demand for market rate rental apartments is also on the upswing,” said Ron Terwilliger, CEO of Trammell Crow Residential. “The health of apartment company stocks on Wall Street is another sign of the overall strength of the housing market right now.”
NAHB’s Multifamily Stock Index tracks the total returns (including capital gains and dividends) of 27 publicly traded firms principally involved in the ownership and management of apartments.
In September, the MFSI rose by 48 points to 2,554 or almost two percent. That figure is almost 26 percent higher than last year’s level at this time, when the MFSI stood at 2,030.
During September, the S&P 500 (with dividends reinvested) also rose, but by less than one percent. Its value is now about 12.5 percent higher than it was at this time last year.
The MFSI is currently outpacing the S&P 500 by more than 130 percent, according to Elliot Eisenberg, a housing policy economist at NAHB and creator of the MFSI.
“Despite the consistently strong showing of the S&P 500 over the past year, the MFSI continues to outperform it,” noted Eisenberg.
NAHB created the Multifamily Stock Index in 2002 as a way to more easily track the performance of public firms involved in multifamily housing. To allow for historical comparisons to be made between the MFSI and other financial indices, the starting point for tracking performance data for these publicly traded firms was set at Dec. 31, 1998.
The MSFI appears monthly in NAHB’s electronic newsletter Multifamily Market Outlook. More information about the index is available at www.nahb.org/multifamily.