Low-Rise Multifamily Shows Strength at End of 2025; Other Segments Weak

Confidence in the market for new multifamily housing decreased year-over-year in the fourth quarter, according to the Multifamily Market Survey (MMS) released today by the National Association of Home Builders (NAHB). The MMS produces two separate indices. The Multifamily Production Index (MPI) had a reading of 45, down three points year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 74, down seven points year-over-year.

The MPI measures builder and developer sentiment about current production conditions in the apartment and condo market on a scale of 0 to 100. The index and all its components are scaled so that a number below 50 indicates that more respondents report conditions are poor than report conditions are good.

The MPI is a weighted average of four key market segments: three in the built-for-rent market (garden/low-rise, mid/high-rise and subsidized) and one in the built-for-sale (or condominium) market. While the component measuring garden/low-rise increased two points to 54, the other three components were under the break-even point of 50 and declined year-over-year. The component measuring mid/high-rise units fell eight points to 31, the component measuring subsidized units decreased five points to 47 and the component measuring built-for-sale units posted a six-point decline to 36.

The MOI measures the multifamily housing industry’s perception of occupancies in existing apartments on a scale of 0 to 100. The index and all its components are scaled so that a number above 50 indicates more respondents report that occupancy is good than report it is poor. The reading of 74 indicates existing apartment owners are positive about occupancy overall.

The MOI is a weighted average of three built-for-rent market segments (garden/low-rise, mid/high-rise and subsidized). Although all three components declined year-over-year, they all remained above the break-even point of 50. The component measuring garden/low-rise units decreased five points to 76, the component measuring mid/high-rise units fell 12 points to 62 and the component measuring subsidized units dipped three points to 88.

“Multifamily developers are somewhat less optimistic than they were at this time last year—except in the market segment for garden or low-rise apartments,” said Debra Guerrero, senior vice president of strategic partnerships and government affairs at The NRP Group in San Antonio and chairman of NAHB’s Multifamily Council. “Elevated construction costs and the local regulatory environment continue to be major headwinds to faster growth. While interest rates have eased slightly, they still need to come down further to significantly spur new construction.”

“Both the MPI and MOI in the fourth quarter indicated that the multifamily market is substantially stronger for garden and low-rise buildings than for mid- and high-rise,” said NAHB Chief Economist Robert Dietz. “This suggests that the 2025 trend of gains in multifamily market share for outlying metro and non-metro counties—where garden and low-rise structures are more common—is likely to continue in 2026.”

The MMS was re-designed in 2023 to produce results that are easier to interpret and consistent with the proven format of other NAHB industry sentiment surveys. Until there are enough data to seasonally adjust the indices, changes in the MPI and MOI should only be evaluated on a year-over-year basis.

For more recent information about the market, the survey contains a separate question asking multifamily developers to compare current market conditions to conditions three months earlier. In the fourth quarter of 2025, 14% of respondents said the current market is better, and 18% said it is worse. However, the vast majority of developers—68%—said that the market is currently about the same as it was three months ago.

For additional information on the MMS, visit nahb.org/mms.

For more information on the NAHB Multifamily program, please visit NAHB Multifamily.