In the third quarter of 2012, NAHB’s Multifamily Vacancy Index (MVI) improved 3 points to 33, largely offsetting the previous quarter’s 5 point swing in the other direction. The MVI is a measure of property owners’ sentiment about vacancies in existing rental apartments, so lower numbers are better.
After hitting a record high of 70 in the second quarter of 2009, the MVI began to improve consistently, until dropping to 33 at the end of 2010. For the past two years, the MVI has remained fairly stable in the low-to-mid 30s, which is as low as the vacancy index has ever been (the data go back to 2003).
When conditions are changing, the MVI generally turns at least one quarter before the Census Bureau’s hard measure of rental vacancies. In 2009, improvement in the Census rate of vacancies in buildings with at least 5 apartments began one quarter after the MVI and was much more gradual. Since then, the 5+ rental vacancy rate has continued its gradual drift downward, and at 9.1 is now as low it’s been since 2000.
With both the MVI and 5+ vacancy rate currently at healthy levels, there’s no strong reason to suspect either will change drastically in the near future.
The MVI is one of two main sentiment indices produced from NAHB’s quarterly survey of multifamily developers, property owners, and managers; the other being the Multifamily Production Index (MPI). For more information, including a complete history for both indices and all of their components, see NAHB’s web page for the MPI & MVI.