Stocks Fell Last Month and Multifamily Stocks Fell a Bit Further
During the month of April, the MFSI fell by 143 points — almost 8%. With this fall, the MFSI is back to where it was nine months ago, but is still almost 14% higher than last year at this time. During the past month, the S&P 500 with dividends fell by 1.5% now is almost 23% higher than it was 12 months ago — a performance nine percentage points better than the MFSI. Because the MFSI fell slightly while the S&P 500 with dividend reinvested declined quite substantially during April, the percentage difference between the two indexes narrowed from 86% to 75%, a level last seen almost two years ago. Despite the consistently strong showing of the S&P 500 over the past year — the S&P has substantially outperformed the MFSI over the past 12 months — the MFSI continues to dramatically outperform the S&P 500 over longer periods of time including the past three, four and five years. Since December 1998, the MFSI has risen by 70% while the S&P 500 with dividends has fallen by about three percentage points.

During the month of April, the price-to-earnings ratio (P/E) of the MFSI eased from 18.07 to 16.54, while the dividend yield, defined as the total cash dividend payments divided by the current stock price, rose from 6.02% to 6.54%. The MFSI is an index of 28 publicly traded US headquartered firms, including 23 REITs, principally involved in multifamily ownership and management.

¹ For initial article discussing the MFSI in detail see NAHB Multifamily Market Outlook, January 2002.  ² Percent difference is defined as (MFSI minus S&P 500 with dividends)/S&P 500 with dividends.