Sentiment index weakened in the first quarter of 2019
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Builders’ confidence in the market for newly-built apartments and condos has weakened to its lowest since the third quarter of 2010.
The National Association of Home Builders (NAHB) Multifamily Production Index (MPI) dropped 7 points to a reading of 40 in Q1 2019; a reading below 50 means a larger share of respondents say conditions are worsening.
At the same time, NAHB’s Multifamily Vacancy Index (MVI) rose three points to 48, with higher numbers indicating more vacancies.
"The recent weakness in the MPI is consistent with our forecast for 2019," said NAHB Chief Economist Robert Dietz. "Multifamily housing starts experienced a gain in 2018. Even after a slight decline for starts in the first quarter of 2019, permit growth is occurring, and production should level off moving forward. The market remains dominated by rental production, with a 94 percent share at the start of 2019.”
Gary Campbell, CEO of Gilbert G. Campbell Real Estate in Lowell, Mass., and chairman of NAHB’s Multifamily Council says that builders are cautious right now as they wait to see what happens with recently-completed projects.
"However, we're seeing that developers are reasonably optimistic about what's ahead for units on the affordable end of the spectrum,” he added.
Confidence in the market for new multifamily housing weakened in Q1 2019, according to the NAHB Multifamily Market Survey (MMS). The Multifamily Production Index (MPI) dropped seven points to 40, the lowest reading since Q3 2010. https://t.co/VtgxxFrz8l pic.twitter.com/bU7Edrhgmz— NAHB (@NAHBhome) May 23, 2019
