Confidence in the market for new multifamily housing declined year-over-year in the first quarter, according to results from the Multifamily Market Survey (MMS) released by the National Association of Home Builders (NAHB).
The MMS produces two separate indices: the Multifamily Production Index, with a reading of 47 that was down three points year-over-year, and the Multifamily Occupancy Index, with a reading of 83 that was up one point year-over-year.
“Multifamily developers are concerned about higher interest rates for construction and development loans and tighter lending conditions that are taking place in the market right now,” said Tom Tomaszewski, president of The Annex Group and chairman of NAHB’s Multifamily Council. “There are also many areas across the country where developers are having a difficult time getting their projects approved.”
“Owners of existing apartments continue to report strong occupancy, but this has the potential to soften when more of the 900,000-plus apartments currently under construction come on line,” said NAHB Chief Economist Robert Dietz. “NAHB is currently projecting that multifamily starts will fall 28% this year as developer activity slows.”
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