MFSI Down, S&P 500 Down Further
During the month of May, the MFSI declined by slightly less than 42 points, or almost one-and-one-half percent. With this decrease, the MFSI is  at its third highest reading of all time, and is still almost 28% higher than it was just 12 short months ago. During the past month, the value of the S&P 500 with dividends reinvested skidded by almost 3% and, as a result, it now finds itself almost 9% above where it was a year ago. Because the S&P 500 with dividends reinvested declined by about twice as much as the MFSI during the month of May, the performance gap—or percentage difference—between the two indexes increased from 150% in April to 154% in May, which is just six percentage points lower than the all-time high of 160% set two months ago.

Despite the very strong 66% rise in the S&P 500 since its recent low, set in October 2002, the MFSI has risen an even-larger 107% during the same 44-month time period. In addition, the MFSI continues to dramatically outperform the S&P 500 over longer time periods, including the past four, five and six years. Since December 1998, the MFSI has risen by a whopping 195% while the S&P 500 with dividends reinvested has gained a meager 16%.

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.

       
During the month of May, the price-to-earnings ratio (P/E) of the MFSI declined slightly and now stands at 17.23 while the dividend yield, defined as the total cash dividend payments divided by the current stock price, and which moves in the opposite direction, climbed to 4.10%. The MFSI is an index of 24 publicly traded US headquartered firms, including 20 REITs, principally involved in multifamily ownership and management. [ return to top ]