Rising interest rates were blamed for declining developer confidence in the market for new multifamily housing, according to second quarter data from the National Association of Home Builders (NAHB).
The trade group’s newly published Multifamily Market Survey produces two separate indices: The Multifamily Production Index had a reading of 44, down 12 points from the second quarter of 2023, and the Multifamily Occupancy Index had a reading of 81, down eight points over the same period.
“Multifamily developers are less optimistic than they were at this time last year,” said Tom Tomaszewski, president of The Annex Group and chairman of NAHB’s Multifamily Council. “Some are struggling with particular local regulations, but the main reason it’s difficult to get projects started is high interest rates.”
“There is no doubt that interest costs and limited financing availability are making it difficult to develop multifamily properties,” added NAHB Chief Economist Robert Dietz. “However, financial markets may become more stable later in the year, as recent weak economic data make it more likely the Fed will cut interest rates.”
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