Multifamily Stocks Continue to Defy Gravity, Rise to New High
During the month of October, the MFSI increased by slightly more than 277 points — a shade more than 8%. With this dramatic rise, the MFSI is, yet again, at new all-time high, and is more than 44% higher than it was just 12 short months ago. During the past month, the value of the S&P 500 with dividends reinvested jumped by three-and-a-quarter percent and, as a result, it now finds itself almost 17% above where it was a year ago.

Because, on a percentage basis, the MFSI with dividends reinvested rose by slightly more than twice as much as the S&P 500 with dividends reinvested during the month of October, the performance gap — or percentage difference — between the two indexes increased from 175% in June to 188% in October, which is 10 points higher than the previous all-time high of 178% set in August of 2006.

Despite the very strong 82% rise in the S&P 500 since its recent low, set in October 2002, the MFSI has risen a staggering 156% during the same 49-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 264.8% while the S&P 500 with dividends reinvested has gained a meager 26.7%.

 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 September, the price-to-earnings ratio (P/E) of the MFSI rose slightly and now stands at 19.04 while the dividend yield, defined as the total cash dividend payments divided by the current stock price, and which moves in the opposite direction, eased to 3.19%. The MFSI is an index of  24 publicly held companies, including 20 REITs, principally involved in multifamily ownership and management. [ return to top ]