The MFSI Slides Downward at the Start of the Year
During the month of January, the MFSI fell by 308 points. With this large monthly decrease, the MFSI is now down slightly more than 40% over the past 12 months, and its 12-month performance has been negative for 18 of the past 19 months — its worst performance ever. The January decrease of almost 16% returns the MFSI to a level last seen in mid-2003 — well over 65 months ago. Moreover, with this latest sizeable decline the MFSI finds itself at 2,189 points, or almost 57% off its all-time high reached in January 2007.

During the past month, the value of the S&P 500 with dividends reinvested fell by slightly more than 8% and now finds itself down almost 39% over the past 12 months, the first time it has been in negative territory for 13 straight months year-over-year in more than six years. Because the S&P 500 with dividends decreased by about 8% while the MFSI declined by almost 16%, or about twice as much, during the month of January, the performance gap — or percentage difference — between the two indexes decreased from 126% last month to 108%. Despite the 14% rise in the S&P 500 since its cyclical low set in October 2002, the MFSI has risen by a slightly stronger 17% during the same 75-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 66% while the S&P 500 with dividends reinvested has declined by slightly more than 20%. During the month of December the price-to-earnings ratio (P/E) of the MFSI eased and now stands at 6.03 while the dividend yield, defined as the total cash dividend payments divided by the current stock price, and which moves in the opposite direction, rose to 12.30%. 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 ]