MFSI Falls, Awaiting the Bottom
During the month of February, the MFSI fell by 403 points. With this large monthly decrease, the MFSI is now down slightly more than 54% over the past 12 months, and its 12-month performance has been negative for 19 of the past 20 months — its worst performance ever. The February decrease of about 24% returns the MFSI to a level last seen in middle 2000 — well over eight years ago.

Moreover, with this latest sizeable decline, the MFSI finds itself 2,590 points, or almost 68%, 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 less than 11% and now finds itself down almost 44% over the past 12 months, the first time it has been in negative territory for 14 straight months year-over-year in well over six years.

Because the S&P 500 with dividends decreased by about 11% while the MFSI declined by almost 24% (about twice as much) during the month of February, the performance gap — or percentage difference — between the two indexes decreased from 108% last month to 77%. Since its cyclical low set in October 2002, the S&P 500 with dividends has increased by a scant 2%, while the MFSI has declined by 6.5% during the same 75-month time period. However, 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 strong 26% while the S&P 500 with dividends reinvested has declined by slightly more than 28%. During the month of February, the price-to-earnings ratio (P/E) of the MFSI eased and now stands at 4.07, 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 16.00%. 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 ]