The survey asks multifamily builders to rate the current conditions for occupancy of existing rental apartments in markets where they are active as “good,” “fair” or “poor.”
For the first quarter, the component measuring garden/low-rise units had a reading of 84, the component measuring mid/high-rise units had a reading of 74 and the component measuring subsidized units had a reading of 87.
“NAHB’s current forecast has multifamily starts declining by more than 10% per year in 2023 and 2024,” said NAHB Chief Economist Robert Dietz. “Commentary from multifamily builders indicates that it has become more difficult to obtain loans for multifamily development as a result of tightening financial conditions due to actions of the Federal Reserve, which reduce future apartment construction.”
Because the previous version of the MMS series can no longer be used to compare with this quarter’s results, the redesigned tool asked builders and developers to compare current market conditions in their areas to three months earlier, using a “better,” “about the same” or “worse” scale.
The NAHB reports 67% of respondents said the market is “about the same” as it was three months earlier.
“Garden/low-rise units had the strongest production index of all four sectors covered in the survey, while subsidized units had the strongest occupancy index,” said Lance Swank, president and co-owner of Sterling Group, Inc. in Mishawaka, Ind., and chairman of NAHB’s Multifamily Council. “However, higher interest rates and increased construction costs are negatively impacting projects in certain parts of the country.”
For additional information on the MMS, visit nahb.org/mms.