Builder confidence in the market for new multifamily housing declined year-over-year during the first quarter, according to the National Association of Home Builders’ (NAHB) Multifamily Market Survey.
The Multifamily Production Index (MPI) had a reading of 44, down three points year-over-year. The MPI measures builder and developer sentiment about current production conditions in the apartment and condo market on a scale of 0 to 100. The index and all its components are scaled so that a number below 50 indicates that more respondents report conditions are poor than report conditions are good.
The Multifamily Occupancy Index (MOI) had a reading of 82, down one point year-over-year. The MOI measures the multifamily housing industry’s perception of occupancies in existing apartments on a scale of 0 to 100 – and as with the MPI, a number above 50 indicates more respondents report that occupancy is good than report it is poor.
“While occupancy in existing buildings remains strong, multifamily developers are remaining cautious about starting new projects, especially mid/high-rise and condominium projects,” 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. “Construction costs, regulatory barriers and financing are the main headwinds right now, with some developers also citing uncertainty about tariffs as a reason to be cautious.”
“The MPI of 44 is consistent with NAHB’s forecast for a modest decline in the rate of multifamily production for the remainder of 2025, followed by a modest recovery in 2026,” added NAHB Chief Economist Robert Dietz. “Like remodelers and single-family builders, multifamily developers are being affected by rising costs and economic policy uncertainty. In NAHB’s first quarter multifamily survey, more than half of the developers reported that their suppliers have increased prices due to announced, enacted or anticipated tariffs.”
