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MFSI Performance Needs a Substantial Boost
During the month of May, the MFSI rose by 31 points. With this monthly increase, the MFSI now is down slightly more than 41% over the past 12 months, and its 12-month performance has been negative for 22 of the past 23 months — its worst performance ever. The May increase of almost 2% returns the MFSI to a level last seen in Early 2004 — well over five years ago. Moreover, with this latest rise, the MFSI finds itself off 2,050 points, or almost 53% off its all-time high reached in January 2007.
During the past month, the value of the S&P 500 with dividends reinvested jumped by slightly less than 6% and now finds itself down slightly more than 32% over the past 12 months, the first time it has been in negative territory for 17 straight months year-over-year in well over six years. Because the S&P 500 with dividends increased by close to 6% while the MFSI rose by almost 2%, or about three times as much, during the month of May, the performance gap—or percentage difference—between the two indexes decreased from 108% last month to 101%.
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 its cyclical low set in October 2002 the S&P 500 with dividends has increased by 28%, while the MFSI has increased by a slightly better 34% during the same 78 month time period. And, 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 strong 80% while the S&P 500 with dividends reinvested has declined by slightly more than 10%. During the month of May the price-to-earnings ratio (P/E) of the MFSI rose and now stands at 9.47 while the dividend yield, defined as the total cash dividend payments divided by the current stock price, and which moves in the opposite direction, declined to 11.72%.The MFSI is an index of 19 publicly traded US headquartered firms, including 16 REITs, principally involved in multifamily ownership and management.
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