MFSI Up — Two Months in a Row
 

During the month of December, the MFSI rose by 215 points. With this monthly increase, the MFSI is now up slightly less than 31% over the past 12 months. This is the first time the year-over-year comparison has been positive for two straight months in roughly two-and-a-half years, bringing to an end its worst performance period ever. The December increase of a bit more than 9% returns the MFSI to a level last seen in late 2005 — about four-and-a-half years ago. With this most recent increase, the MFSI finds itself 1,276 points, or about 33%, off its all time high reached in January 2007.

 
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. 

During the past month, the value of the S&P 500 with dividends reinvested increased by slightly less than 2%, and it now finds itself up slightly more than 26% over the past 12 months — the first time it has been in positive year-over-year territory for three months in a row in more than two years. 

Because the MFSI increased by a little more than 9% while the S&P 500 with dividends rose by a shade less than 2%, or by about a fifth as much as the MFSI, during the month of December, the performance gap — or percentage difference — between the two indexes increased from 119% last month to 134%, its highest reading in more than 13 months. 

Since its cyclical low set in October 2002, the S&P 500 with dividends has increased by 58%, while the MFSI has increased by a substantially better 91% during the same 87-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 157% while the S&P 500 with dividends reinvested has risen by a scant 10%. During the month of October, the price-to-earnings ratio (P/E) of the MFSI rose and now stands at 34.45 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 6.34%.

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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