US Multifamily Developer Sentiment Declines in Q1

According to the National Association of Home Builders (NAHB) Multifamily Market Survey (MMS) released on Thursday, multifamily developers started Q1 in a cautious state of mind.

The MMS produces two separate indices:

1. The Multifamily Production Index (MPI) decreased three points year-over-year to a reading of 44 in Q1. This marks the seventh consecutive quarter below the break-even point of 50.
2. The Multifamily Occupancy Index (MOI) had a reading of 82, slightly lower than the 83 reading it recorded in 2024Q1.

Multifamily Production Index

Three of the four components experienced year-over-year decreases. The component measuring mid/high-rise units fell eight points to a reading of 28. The components measuring garden/low-rise and built-for-sale units both dipped by one point to readings of 54 and 38, respectively. The component measuring subsidized units was unchanged at 50.

Multifamily Occupancy Index

Two of the three MOI components experienced year-over-year declines in Q1. The component measuring subsidized units dropped by five points to a reading of 89. The garden/low-rise component decreased two points to a reading of 82. Meanwhile, the component measuring mid/high-rise units rose two points to a reading of 76. Despite the declines, all three MOI components remain well above the break-even point of 50.

NAHB notes that the MMS was redesigned in 2023 to produce results that are easier to interpret and consistent with the proven format of other NAHB industry sentiment surveys. Until there is enough data to seasonally adjust the series, changes in the MMS indices should only be evaluated on a year-over-year basis.