Confidence out there for brand spanking new multifamily housing weakened year-over-year within the second quarter, based on the Multifamily Market Survey (MMS) by the Nationwide Affiliation of House Builders (NAHB). The MMS produces two separate indices. The Multifamily Manufacturing Index (MPI) had a studying of 43, down three factors year-over-year, whereas the Multifamily Occupancy Index (MOI) had a studying of 74, down eight factors year-over-year.
Multifamily developer sentiment is at present constrained by regulatory limitations and issue acquiring financing. The just lately enacted twenty first Century ROAD to Housing Act ought to present some aid with respect to those challenges, however these insurance policies will take time to implement. In the meantime, rental housing demand is being supported by bettering job development through the second quarter of 2026. It’s clear that supply-side headwinds proceed to weigh on multifamily developer sentiment. Along with comparatively excessive rates of interest and different financing points, builders are discovering it troublesome to acquire approvals and utility connections in some components of the nation. Excessive materials costs and shortages of expert labor additionally stay vital impediments
Multifamily Manufacturing Index (MPI)
The MMS asks multifamily builders to fee the present situations as “good”, “truthful”, or “poor” for multifamily begins in markets the place they’re energetic. The index and all its elements are scaled so {that a} quantity above 50 signifies that extra respondents report situations pretty much as good slightly than poor. The MPI is a weighted common of 4 key market segments: three within the built-for-rent market (backyard/low-rise, mid/high-rise, and sponsored) and the built-for-sale (or condominium) market.
There have been three elements which skilled decreases year-over-year through the second quarter. The element measuring sponsored models fell seven factors to 54, the element measuring mid/high-rise dropped 4 factors to 32, and the element measuring backyard/low-rise dipped two factors to 48. In the meantime, the element measuring built-for-sale models was the one one to extend year-over-year, up three factors to 38.
Multifamily Occupancy Index (MOI)
The survey additionally asks multifamily property house owners to fee the present situations for occupancy of present rental flats in markets the place they’re energetic as “good”, “truthful”, or “poor”. Just like the MPI, the MOI and all its elements are scaled so {that a} quantity above 50 signifies extra respondents report that occupancy is nice than poor. The MOI is a weighted common of three built-for-rent market segments (backyard/low-rise, mid/high-rise, and sponsored).
Though all three elements declined year-over-year, all of them remained above the break-even level of fifty for the second quarter of 2026. The mid/high-rise element dropped 11 factors to 62, the sponsored element decreased eight factors to 82, and the backyard/low-rise element fell seven factors to 77.
The MMS was re-designed in 2023 to provide outcomes which can be simpler to interpret and in line with the confirmed format of different NAHB trade sentiment surveys. Till there’s sufficient information to seasonally modify the collection, adjustments within the MMS indices ought to solely be evaluated on a year-over-year foundation.
Please go to NAHB’s MMS internet web page for the total report.
