MFSI Hits Second Best Monthly Performance Ever
During the month of August, the MFSI rose by 288 points, its second-best monthly performance ever. With this monthly increase, the MFSI is now down slightly more than 32% over the past 12 months, and its 12-month performance has been negative for 24 of the past 25 months — its worst long-term performance ever. The August increase of slightly more than 16% returns the MFSI to a level last seen in late 2008—not even 12 momths ago.
Despite this most recent dramatic rise the MFSI still finds itself 1,787 points — or almost 47% — 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 4% and it now finds itself down slightly more than 18% over the past 12 months, the first time it has been in negative territory for 19 straight months year-over-year in well over six years. Because the MFSI increased by about 16% , or by more than four times as much as the S&P 500 during the month of August, the performance gap—or percentage difference—between the two indexes increased from 84% last month to 106%.
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 44%, while the MFSI has increased by a slightly better 53% during the same 79-month time period. And the MFSI continues to dramatically outperform the S&P 500 over longer time periods, including the past 10, 11 and 12 years. Since December 1998, the MFSI has risen by 106% while the S&P 500 with dividends reinvested finds itself exactly where it began.
During the month of August the price-to-earnings ratio (P/E) of the MFSI rose and now stands at 13.98, 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 8.45%. The MFSI is an index of 18 publicly traded US headquartered firms, including 16 REITs, principally involved in multifamily ownership and management.
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