Multifamily Developer Confidence Weakens in Q2
According to a new survey by the National Association of Home Builders, confidence in the market for new multifamily housing weakened year-over-year in the second quarter.
That’s according to the Multifamily Market Survey (MMS) by the NAHB.
The MMS produces two separate indices, NAHB noted. The Multifamily Production Index (MPI) had a reading of 43, down three points year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 74, down eight points year-over-year.
NAHB said that multifamily developer sentiment is constrained by regulatory barriers and difficulty obtaining financing.
It said that the recently enacted 21st Century ROAD to Housing Act should provide some relief with respect to these challenges, but that those policies will take time to implement.
NAHB said that rental housing demand is being supported by improving job growth during the second quarter of 2026 and that it is clear that supply-side headwinds continue to weigh on multifamily developer sentiment. Also, NAHB said that in addition to relatively high interest rates and other financing issues, developers are having difficulty obtaining approvals and utility connections in some parts of the country.
High material prices and shortages of skilled labor also remain significant impediments, NAHB said.
All Components Had Decreases
According to the NAHB, the MMS asks multifamily developers to rate the current conditions as “good”, “fair”, or “poor” for multifamily starts in markets where they are active. The index and all its components are scaled so that a number above 50 indicates that more respondents report conditions as good rather than poor.
NAHB said that there were three components that experienced decreases year-over-year during the first quarter. The component measuring subsidized units fell seven points to 54, the component measuring mid/high-rise dropped four points to 32, and the component measuring garden/low-rise dipped two points to 48.
The component measuring built-for-sale units was the only one to increase year-over-year, up three points to 38, NAHB said.
The survey also asks multifamily property owners to rate the current conditions for occupancy of existing rental apartments in markets where they are active as “good”, “fair”, or “poor”.
MOI Saw Decreases
Like the MPI, the MOI and all its components are scaled so that a number above 50 indicates more respondents report that occupancy is good than poor, NAHB said.
While all three components declined year-over-year, they all remained above the break-even point of 50 for the second quarter of 2026, NAHB said. The mid/high-rise component dropped 11 points to 62, the subsidized component fell eight points to 82, and the garden/low-rise component fell seven points to 77.
