MFSI Heads Upward After Three-Month Decline
During the month of May, the MFSI rose by an impressive 276 points—its first increase follwing three straight months of decline. As a result of this increase, the MFSI is now up slightly more than 2%, year-to-date. The May increase of a shade over eight-and-one-quarter percent is the sixth largest increase ever, and wipes out about half the declines experienced by the index over the past three months  With this recent rise, the MFSI finds itself about 6.5% off its all-time high—set just four months ago—and is more than 22% higher than it was just 12 months ago.

During the past month, the value of the S&P 500 with dividends reinvested rose by almost three-and-a-half percent and, as a result, it now finds itself almost 23% higher than it was one year ago. Because the MFSI rose by about twice as much as the S&P 500 with dividends rose during the month of May, the performance gap--or percentage difference—between the two indexes increased from 142% last month to 153% in May. Despite the very strong 104% rise in the S&P 500 since its recent low, set in October 2002, the MFSI has risen 153% during the same 56-month time period. In addition, the MFSI continues to dramatically outperform the S&P 500 over longer time periods including the past five, six and seven years. Since December 1998, the MFSI has risen by a whopping 260% while the S&P 500 with dividends reinvested has gained a meager 42%.

For initial article discussing the MFSI in detail see NAHB Multifamily Market Outlook, January 2002.  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 strengthened slightly and now stands at 21.78 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 3.36%. The MFSI is an index of 21 publicly traded US headquartered firms, including 17 REITs, principally involved in multifamily ownership and management. [ return to top ]