Multifamily Stock Index Pulls Back Slightly
During the month of November, the MFSI decreased by almost 16 points — a shade less than one-half of 1%. With this slight decline, the MFSI is near its all-time high, and more than 38% higher than it was just 12 months ago. During the past month, the value of the S&P 500 with dividends reinvested jumped by one-and-nine-tenths of a percent and, as a result, it now finds itself almost 15% above where it was one year ago.

Because the S&P 500 with dividends reinvested rose substantially during the month of November, while the MFSI declined slightly during the month, the performance gap — or percentage difference — between the two indexes decreased from 188% in October to 181% in November, which is seven  points below the all-time high of 188% set in the previous month.

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.

Despite the very strong 85% rise in the S&P 500 since its recent low set in October 2002, the MFSI has risen a staggering 155% during the same 50-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 263% while the S&P 500 with dividends reinvested has gained a meager 29%. During the month of November, the price-to-earnings ratio (P/E) of the MFSI rose slightly and now stands at 19.59 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 3.15%.  The MFSI is an index of 23 publicly traded US headquartered firms, including 20 REITs, principally involved in multifamily ownership and management.