Multifamily Stock Index Continues to Rise
During the month of July the MFSI rose by 332 points, more than erasing the 308 point decline suffered in June. With this steep increase, the MFSI is up by slightly more than 16.5% year-to-date. The July gain of about 12%—the largest one-month rise of all time and the fifth increase in the last six months—suggests that the MFSI may be distancing itself from its poor performance of 2007. With this most recent jump, the MFSI has risen in 8 of the past 12 months and is firmly in positive territory year-to-date for the seventh month in a row. With the latest increase, the MFSI finds itself 759 points -—or about 20%—off its all-time high reached in January 2007.

During the past month, the value of the S&P 500 with dividends reinvested decreased by slightly less than 1% and now finds itself down a bit more than 11% over the past 12 months, the first time it has been in negative territory for seven straight months, year-over-year, in about five years. Because the S&P 500 with dividends eased slightly while the MFSI increased during the month of July, the performance gap—or percentage difference—between the two indexes increased from 127% last month to 156%. Despite the very strong 73% rise in the S&P 500 since its cyclical low set in October 2002, the MFSI has risen by a substantially stronger 117% during the same 70-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.

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

Since December 1998, the MFSI has risen by a whopping 209% while the S&P 500 with dividends reinvested has gained a much smaller 21%. During the month of July the price-to-earnings ratio of the MFSI increased and now stands at 11.82 while the dividend yield, defined as the total cash dividend payments divided by the current stock price, and which moves in the opposite direction, fell to 5.12%.

 The MFSI is an index of 19 publicly traded US headquartered firms, including 16 REITs, principally involved in multifamily ownership and management. [ return to top ]