NAHB Multifamily Market Survey Shows Mixed Results for Q4

On Thursday, the National Association of Home Builders (NAHB) released the results of its Multifamily Market Survey (MMS) for 2024Q4.

The MMS produces two separate indices. The Multifamily Production Index (MPI) increased 7 points year-over-year to a reading of 48, still below the break-even point of 50. The Multifamily Occupancy Index (MOI) had a reading of 81, up 4 points year-over-year.

Multifamily Production Index (MPI)

NAHB notes that an MPI reading below 50 is consistent with the decline in multifamily starts that the sector experienced in both 2023 and 2024. Multifamily developers are slightly less pessimistic than they were at this time last year, but supply-chain problems and high interest rates remain serious barriers to a stronger market. NAHB forecasts multifamily construction will decline again in the first half of 2025 before stabilizing toward the end of the year, with the industry supported by a low national unemployment rate.

Three of the four MPI components experienced year-over-year increases: The component measuring mid/high-rise units rose 13 points to a reading of 39, subsidized units increased 11 points to a reading of 52, and garden/low-rise units added one point to a reading of 52. The only component to experience a decline year-over-year was built-for-sale units, falling one point to a reading of 42. However, only two MPI components (garden/low-rise and subsidized) were above the break-even point of 50.

Multifamily Occupancy Index (MOI)

The MOI is a weighted average of the three built-for-rent market segments (garden/low-rise, mid/high-rise, and subsidized).

All three components for the MOI experienced year-over-year gains. The component measuring mid/high-rise units rose 10 points to a reading of 74, subsidized units increased by 3 points to a reading of 91, and garden/low-rise units added one point to a reading of 81. All three MOI components were above the break-even point of 50.