Builder confidence in the new multifamily housing market increased year-over-year in the third quarter, according to the Multifamily Market Survey released by the National Association of Home Builders (NAHB).
The MMS produces two separate indices. The Multifamily Production Index (MPI), which measures builder and developer sentiment about current production conditions in the apartment and condo market on a scale of 0 to 100, had a reading of 46, up six points year-over-year, while the Multifamily Occupancy Index (MOI), which measures the multifamily housing industry’s perception of occupancies in existing apartments on a scale of 0 to 100, had a reading of 74, down one point year-over-year.
“We are seeing a degree of bifurcation in the multifamily market, as developers of low-rise market-rate and subsidized rental properties express increased optimism, while developers of mid- and high-rise properties and condominiums remain less confident,” said Debra Guerrero, senior vice president of strategic partnerships and government affairs at The NRP Group in San Antonio and chairman of NAHB’s Multifamily Council. “Significant challenges such as the current regulatory environment, rising construction costs and difficulties in securing project financing continue to affect the multifamily sector as a whole.”
“The MPI and MOI are giving us a mixed picture of the multifamily market, with strength in some market segments, but weakness concentrated in the mid-to-high-rise developments that tend to be common in high-density metro areas,” added NAHB Chief Economist Robert Dietz. “This is consistent with NAHB’s Home Building Geography Index, which shows multifamily construction activity growing in areas with low population densities but weakening in the larger metros.”
