Uncertainty continues to plague apartment development, with National Multifamily Housing Council’s (NMHC’s) quarterly construction survey in June showing mixed market conditions.
Results showed an improved environment for construction delays. Over the last three months, 43% reported delays, down from 58% in March, 78% in December, and 52% in September. June’s data is the lowest level of reported delays since the survey began and the first time the share has fallen below 50%.
Economic uncertainty was the most frequently cited cause for delays in starts over the past three months with 71% of respondents, up from 68% in March and 42% in December. More than half of respondents, 57%, separately cited economic feasibility and permitting, entitlement, and professional services as reasons for delays.
Availability of construction financing also was cited for delayed starts by 29% of the respondents, decreasing for six consecutive quarters.
The share of respondents in June who reported deals repriced up was 38%, up from 25% in March, while 34% said deals were repriced down, decreasing from 50% three months ago.
“While the June survey results indicate improving conditions for multifamily construction—respondents reported greater availability of construction labor compared to three months ago and fewer delays—we also know that far fewer projects are being started to begin with,” said Chris Bruen, NMHC economist and senior director of research. “A combination of economic uncertainty, high interest rates, and increasing construction costs caused multifamily starts to fall 35.1% between the first quarter of 2024 and the first quarter of 2025, according to data from CoStar, and a majority of June survey respondents anticipate that multifamily construction costs will increase even further over the next six to 12 months.”
Over the next three months, the majority of respondents, 70%, said they expect overall conditions to remain the same. Longer term, 55% of respondents reported they expect conditions to improve.
