Multifamily developers continue to navigate construction delays. According to the National Multifamily Housing Council’s quarterly construction survey in June, 70% of respondents reported construction delays; however, this share has declined for four consecutive quarters, down from 81% in March, 84% in December, and 88% in September.
For those experiencing delays, according to the survey conducted between June 4 and 18, 77% cited permitting, which is slightly lower than the 79% in March and 84% in December. In addition, reported delays in starts decreased for the second consecutive quarter to 84% of respondents, down from 87% in March and 92% in December.
The share of survey respondents who reported deals being repriced higher increased to 20% in June compared with 13% in March and 23% in December. However, the share of respondents who saw deals repriced lower remained fairly consistent at 50%, down slightly from 52% in March.
Looking ahead, 80% of respondents have confidence that overall multifamily construction market conditions will remain the same, while 14% expect conditions to decline and 5% expect them to improve. There’s more optimism that overall conditions will improve in the medium and long term. Just over a quarter of respondents, 28%, shared they expect conditions to improve three to six months from now, while the majority, 72%, said they expect to see improved conditions over the next six to 12 months.
“Today’s survey makes it clear that rental housing providers continue to face real challenges when it comes to the construction of new communities,” said NMHC president Sharon Wilson Géno. “Construction costs remain high, while housing providers continue to deal with economic uncertainty, high interest rates, rising insurance costs, as well as high state and local taxes. However, there does look to be more confidence that over the medium and longer terms overall market conditions will improve.”
