Multifamily Builders Confidence Edges Higher in Q2 but Vacancy Rate Increases

According to the National Association of Home Builders (NAHB) Multifamily Production Index (MPI) builders confidence in the market for new multifamily housing increased 10 points to a reading of 37 in the second quarter of 2020. However, any reading below 50 indicates that builders view conditions as weak rather than strong. The Multifamily Vacancy Index (MVI) increased 3 points to a reading of 62, which is the highest reading since 2009. The higher number in this case means that the number of vacant units increased from the first quarter of 2020.  Both the MPI and MVI this quarter reflect a multifamily housing market that is continuing its climb back to pre-pandemic levels. The report points out that demand remains subdued in the multifamily market due to higher unemployment numbers. Furthermore, builder and developers are still facing challenges with material costs.