Confidence in the US Market for New Multifamily Declines Year-Over-Year in Q1

On Thursday, the National Association of Home Builders (NAHB) released the results of its Multifamily Market Survey (MMS), showing confidence in the market for new multifamily housing declined year-over-year in Q1.

The MMS produces two separate indices. The Multifamily Production Index (MPI) had a reading of 47, down 3 points from 2023Q1. The Multifamily Occupancy Index had a reading of 83, up 1 point year-over-year.

Multifamily developers are concerned about higher interest rates for construction and development loans, tight lending conditions that are taking place in the market currently, and difficulty with getting projects approved, NAHB reported. While owners of existing apartments continue to report strong occupancy, this has the potential to soften in the near future given the number of units currently under construction.

NAHB projects multifamily starts will decline 28% this year as developers’ activity slows.

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