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NAHB\u2019s 3Q survey of builder attitudes about multifamily development\u2019s short-term future found strong demand amid challenges that could halt some projects.<\/span><\/span><\/p>\n<\/div>\n WASHINGTON \u2013 The prospects for continued high levels of multifamily development declined significantly in the third quarter, as did the prospects for continued high occupancy rates, according to results from the Multifamily Market Survey (MMS) released by the National Association of Home Builders (NAHB).<\/span><\/span><\/p>\n The MMS produces two separate indices. The Multifamily Production Index (MPI) decreased 10 points to 32 compared to the previous quarter, while the Multifamily Occupancy Index (MOI) fell 15 points to 45. Scores fall between 0 and 100. A score of 50 indicates balanced attitudes that are neither optimistic nor pessimistic, and anything below 50 is in negative territory.<\/span><\/span><\/p>\n Even though both indices fell below the break-even point of 50, both multifamily construction levels and occupancy rates remain quite high compared to historic norms.<\/span><\/span><\/p>\n The MPI measures builder and developer sentiment about current production conditions in the apartment and condo market. It\u2019s a weighted average of three key elements of the multifamily housing market:<\/span><\/span><\/p>\n All three components decreased compared to the second quarter: The component measuring low-rent units fell nine points to 36, the component measuring market rate apartments dropped 13 points to 39, and the component measuring for-sale units declined 10 points to 23.<\/span><\/span><\/p>\n The MOI measures the multifamily housing industry\u2019s perception of occupancies in existing apartments. It\u2019s a weighted average of current occupancy indexes for class A, B and C multifamily units, and can also vary from 0 to 100, with a break-even point at 50.<\/span><\/span><\/p>\n The MOI fell 15 points to 45, the lowest level since the first quarter of 2010, with the exception of the onset of the pandemic in the spring of 2020.<\/span><\/span><\/p>\n \u201cAlthough demand for multifamily housing remains strong in many parts of the country, some multifamily developers are starting to see signs of a slowdown,\u201d says Sean Kelly, chairman of NAHB\u2019s Multifamily Council. \u201cThe ongoing problems of scarcity and high cost of land and materials is making it difficult to go forward with certain projects, particularly affordable housing projects.\u201d<\/span><\/span><\/p>\n \u201cMultifamily developers are becoming cautious as supply constraints have caused a large backlog of projects started but not yet completed to accumulate in the pipeline,\u201d adds NAHB Chief Economist Robert Diez. \u201cAn emerging additional constraint is financing for new multifamily development, which 79% of developers say is somewhat or significantly less available than it was a year ago.<\/span><\/span><\/p>\n \u201cNAHB is now projecting a significant decline in multifamily starts in 2023.\u201d<\/span><\/span><\/p>\n \u00a9 2022 Florida Realtors\u00ae<\/span><\/span><\/p>\n<\/div><\/div>\n <\/p>\n <\/p>\n\nMultifamily Production Index<\/span><\/span><\/h3>\n
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Multifamily Occupancy Index<\/span><\/span><\/h3>\n