The Multifamily Production Index (MPI), released last week by the National Association of Home Builders (NAHB), posted a gain of three points to 53 in the third quarter. The MPI has been at 50 or above since the beginning of 2012.

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 a number above 50 indicates that more respondents report conditions are improving than report conditions are getting worse.

The MPI 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. All three components increased in the third quarter. Low-rent units rose two points to 54, and market-rate rental units and for-sale units both increased four points to 57 and 59, respectively.

The Multifamily Vacancy Index (MVI), which measures the multifamily housing industry’s perception of vacancies, remained unchanged at a reading of 42, with lower numbers indicating fewer vacancies. After peaking at 70 in the second quarter of 2009, the MVI improved consistently through 2010 and has been fairly stable since 2011.

“Overall, multifamily developers remain positive about the market,” says Andrew Chaban, CEO of Princeton Properties in Lowell, Mass., and chair of NAHB’s Multifamily Council. “However, in some areas of the country developers have to overcome challenges of labor and lot shortages to meet demand.”

“This quarter’s MPI reading is consistent with our projection that the multifamily housing sector will have a strong year in 2017,” says NAHB chief economist Robert Dietz. “The multifamily sector has led the housing recovery and should continue to be supported by favorable demographics.”

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