The Multifamily Production Index (MPI), released late last month by the National Association of Home Builders, held steady with a reading of 54 for the first quarter of 2015. That was the 13th consecutive quarter with a reading of 50 or above.

The MPI measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100. The index and all of its components are scaled so that any number over 50 indicates that more respondents report conditions are improving than report conditions are getting worse.

The MPI, which is one part of the association’s Multifamily Market Survey, provides a composite measure of three key elements of the multifamily housing market: construction of low-rent units, market-rate rental units, and “for-sale” units, or condominiums. The MPI component tracking low-rent units increased two points to 54 from the fourth quarter of 2014. Market-rate rental units dipped three points from the previous quarter to 59,  and for-sale units held steady at 50.

“Multifamily developers remain positive about the market,” says W. Dean Henry, CEO of Legacy Partners Residential, in Foster City, Calif., and chairman of NAHB’s Multifamily Leadership Board. “We’ll continue to see increased demand as new households form and the job market improves.”

The Multifamily Vacancy Index (MVI), which measures the multifamily housing industry’s perception of vacancies, dropped three points to 36, with lower numbers indicating fewer vacancies. This is the lowest reading since the fourth quarter of 2012.

The MVI starts at 100, with a weighted average of current occupancy indexes for class A, B, and C units subtracted. Like the MPI, the index can vary from 0 to 100, but with the vacancy index, any number over 50 indicates more property managers report negative conditions.

“The steady performance of the MPI reflects the stable production rate we’ve seen recently in apartments and condos,” says NAHB chief economist David Crowe. “In terms of vacancies, the MVI is the lowest it’s been in the last couple of years. As more renters enter the market after having put off forming their own households for an extended period, demand for multifamily housing continues to strengthen.”

Historically, the MPI and MVI have performed well as leading indicators of U.S. Census Bureau figures for multifamily starts and vacancy rates, providing information on likely movement in the Census figures one to three quarters in advance.

The Multifamily Market Survey is based on a quarterly survey of NAHB multifamily builders and property managers. The survey is designed to monitor conditions for multifamily production, or starts, and multifamily rental occupancy in the current versus preceding quarter as well as in the next six months.

Respondents are asked to rate new production of units for sale and for rent—both low-rent and market-rate—as stronger, same, or weaker.  Occupancy in rental Class A, Class B, and Class C units is rated using a similar scale—higher, same, or lower. 

The formulas for the summary indexes were chosen based on correlations between the various component indexes and measures of multifamily production and vacancy published by the U.S. Census Bureau.