MultiFamily Market Outlook - 11/17/2004 (Plain Text Version)

View Graphical Version | Subscribe to NAHB Publications | Email our Editor...
NAHB Home Page| Browse other NAHB e-publications |Search back issues

In this issue:
How Multifamily Housing Pays for Itself
Multifamily Starts Rise This Fall
Real Rents Stagnant in September
Economy Headed For Stability
Multifamily Stock Index Breaks Another Record

Multifamily Stock Index Breaks Another Record

During the month of October, the MFSI rose by 123 points—slightly more than 6%. With this rise, the MFSI is at an all-time high, surpassing the previous mark of 2,026 set in August of this year. At present, the MFSI is almost 24% higher than it was 12 months ago. During the past month the S&P 500 with dividends also rose, but by only 1.5%, and is now more than 9% higher than it was 12 months ago.

Because the MFSI rose by four times as much during October as the S&P 500 with dividends reinvested, the percentage difference between the two indexes widened from 104% to 113%, which breaks the old mark of 107.6% set two months ago. Despite the very strong 38% rise in the S&P 500 since early 2003, the MFSI has risen a staggering 52% during the same 20 months. In addition, the MFSI continues to dramatically outperform the S&P 500 over longer time periods, including the past two, three, four and five years. Since December 1998, the MFSI has risen by 114% while the S&P 500 with dividends reinvested has gained one-tenth of 1%.

During the month of October, the price-to-earnings ratio (P/E) of the MFSI rose from 19.43 to 20.23, while the dividend yield, defined as the total cash dividend payments divided by the current stock price, fell from 5.64% to 5.33%. The MFSI is an index of 28 publicly traded US headquartered firms, including 23 REITs, principally involved in multifamily ownership and management.