Builders had mixed feelings about the multifamily housing sector during the fourth quarter of 2024, according to the newly released Multifamily Market Survey (MMS) published by the National Association of Home Builders (NAHB).
The MMS produces two separate indices. The Multifamily Production Index – which measures builder and developer sentiment about current production conditions in the apartment and condo market – increased seven points year-over-year to a level of 48. The Multifamily Occupancy Index – which measures the multifamily housing industry’s perception of occupancies in existing apartments on a scale of 0 to 100 – had a reading of 81, up four points year-over-year.
“Multifamily developers are slightly less pessimistic than they were at this time last year, but supply-chain problems and high interest rates remain serious barriers to a stronger market,” said Tom Tomaszewski, president of The Annex Group and chairman of NAHB’s Multifamily Council. “Occupancy rates for owners of rental properties have remained solid, although they are struggling with high operating costs.”
“An MPI below 50 is what we would expect given that multifamily starts declined in both 2023 and 2024,” added NAHB Chief Economist Robert Dietz. “We are projecting that multifamily construction will decline again in the first half of 2025 before stabilizing toward the end of the year, with the industry supported by a low national unemployment rate.”
