Multifamily Developer Confidence Holds Steady in First Quarter

The Multifamily Market Survey (MMS) released today by the National Association of Home Builders (NAHB) produced mixed results for the first quarter of 2026. The MMS produces two separate indices. The Multifamily Production Index (MPI) had a reading of 44, unchanged year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 69, down 13 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. The component measuring garden/low-rise units fell six points to 48, the component measuring mid/high-rise units increased seven points to 35, the component measuring built-for-sale units inched down one point to 37. Meanwhile, the component measuring subsidized units rose six points to 56—the only component above the break-even point of 50.

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 69 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 fell 11 points to 71, the component measuring mid/high-rise units dropped 17 points to 59 and the component measuring subsidized units decreased nine points to 80.

“Multifamily developer sentiment is roughly where it was at this time last year, although the combination of regulatory hurdles, interest rates, insurance costs and volatility in material prices is threatening the viability of some projects,” said Kip Lewis, director of construction management at OCCH in Columbus, Ohio, and chairman of NAHB’s Multifamily Council. “Also, in some markets, developers are reporting that it has become more difficult to obtain permits for unsubsidized projects.”

“The MPI and MOI continue to show that the market for garden and low-rise apartments typical of outlying areas is stronger than the market for mid- and high-rise apartments,” said NAHB Chief Economist Robert Dietz. “The gap is narrowing year-over-year for new multifamily construction, however, while widening for the occupancy of existing apartments. NAHB is projecting that multifamily starts will increase slightly in 2026, but current production rates are unlikely to be sustained through 2027.”

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 is 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 first quarter of 2026, 21% of respondents said the current market is better, and 19% said it is worse. However, the majority of developers—60%—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.