Multifamily developer confidence was down in the first quarter, according to the National Association of Home Builders’ (NAHB’s) Multifamily Market Survey. The Multifamily Production Index (MPI) had a reading of 44, down three points year over year, while the Multifamily Occupancy Index (MOI), at 82, was down one point year over year.
The MPI measures builder and developer sentiment about conditions in the apartment and condo market on a scale of 0 to 100. According to the NAHB, the index and all of its components are scaled so that a number below 50 indicates more respondents are reporting that conditions are getting worse rather than improving.
“The MPI of 44 is consistent with NAHB’s forecast for a modest decline in the rate of multifamily production for the remainder of 2025, followed by a modest recovery in 2026,” said NAHB chief economist Robert Dietz. “Like remodelers and single-family builders, multifamily developers are being affected by rising costs and economic policy uncertainty. In NAHB’s first quarter multifamily survey, more than half of the developers reported that their suppliers have increased prices due to announced, enacted, or anticipated tariffs.”
The MPI is a weighted average of four key market segments: three in the build-to-rent market—garden/low-rise, mid/high-rise, and subsidized—and the build-for-sale, or condo, units.
- Garden/low-rise: Declined one point to 54;
- Mid/high-rise: Fell eight points to 28;
- Subsidized: Remained flat at 50; and
- Build-for-sale: Decreased one point to 38.
The MOI’s reading of 82 indicates apartment owners are positive about occupancy. The MOI measures the multifamily industry’s perception of occupancies in existing apartments. It is a weighted average of current occupancy indexes for garden/low-rise, mid/high-rise, and subsidized and can vary from 0 to 100, with a break-even point at 50, where higher numbers indicate occupancy is good. The garden/low-rise component fell two points to 82, the mid/high-rise component increased two points to 76, and the component for subsidized units was down five points to 89.
“While occupancy in existing buildings remains strong, multifamily developers are remaining cautious about starting new projects, especially mid/high-rise and condominium projects,” said Debra Guerrero, senior vice president of strategic partnerships and government affairs at The NRP Group and chairman of NAHB’s Multifamily Housing Council. “Construction costs, regulatory barriers, and financing are the main headwinds right now, with some developers also citing uncertainty about tariffs as a reason to be cautious.”
