Developer confidence edges up, but challenges persist
The latest Multifamily Market Survey (MMS) from the National Association of Home Builders (NAHB) showed the Multifamily Production Index (MPI) rising to 46 in the third quarter, up six points year-over-year but still below the neutral mark of 50.
“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 at The NRP Group 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,” Guerrero said.
The MPI revealed that only garden and low-rise projects crossed into positive territory at 51, while mid- and high-rise units, despite a nine-point gain, remained in negative sentiment territory at 37. The subsidized segment rose to 55, and the built-for-sale (condominium) market climbed to 35.
Occupancy sentiment softens
On the occupancy front, the Multifamily Occupancy Index (MOI) dipped one point year-over-year to 74, its lowest in nearly three years, though still signaling overall positive sentiment. Garden and low-rise units slipped to 76, mid/high-rise units held at 66, and subsidized units dropped to 81.