Multifamily Developer Confidence in Positive Territory for Second Quarter
Confidence in the market for new multifamily housing was in positive territory for the second quarter, the MMS produces two separate indices.
According to NAHB, the MOI is a weighted average of three built-for-rent market segments (garden/low-rise, mid/high-rise and subsidized). The survey asks multifamily builders to rate the current conditions for occupancy of existing rental apartments in markets where they are active as “good,” “fair” or “poor.” For the second quarter, the component measuring garden/low-rise units had a reading of 91, the component measuring mid/high-rise units had a reading of 83 and the component measuring subsidized units had a reading of 91.
NAHB redesigned the MMS in the first quarter of 2023 to make it easier to interpret and more similar to the NAHB/Wells Fargo Housing Market Index for single-family housing. Because the previous version of the MMS series can no longer be used to compare with this quarter’s results, the redesigned tool asked builders and developers to compare current market conditions in their areas to three months earlier, using a “better,” “about the same” or “worse” scale. Seventy percent of respondents said the market is “about the same” as it was three months earlier.
“Multifamily housing demand remains solid, however, there are headwinds limiting new development in many parts of the country,” said Lance Swank, president and CEO of Sterling Group, Inc. in Mishawaka, Ind., and chairman of NAHB’s Multifamily Council. “Reduced availability of credit for new construction, problems getting projects approved and significant increases in operating expenses are hampering new multifamily development. Property, casualty and liability insurance has emerged as a major issue facing the multifamily industry, further constraining new supply.”
