(NAHB) Confidence in the market for new multifamily housing weakened year-over-year in the second quarter, according to the Multifamily Market Survey (MMS) released by the National Association of Home Builders (NAHB). The MMS produces two separate indices. The Multifamily Production Index (MPI) had a reading of 43, down three points year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 74, down eight points year-over-year.
The MPI measures builder and developer sentiment about current production conditions in the apartment and condo market on a scale of 0 to 100. The index and all its components are scaled so that a number below 50 indicates that more respondents report conditions are poor than report conditions are good.
The MPI is a weighted average of four key market segments: three in the built-for-rent market (garden/low-rise, mid/high-rise and subsidized) and one in the built-for-sale (or condominium) market. The component measuring garden/low-rise units dipped two points to 48, the component measuring mid/high-rise units fell four points to 32, the component measuring subsidized units dropped seven points to 54 and the component measuring built-for-sale units increased three points to 38.
The MOI measures the multifamily housing industry’s perception of occupancies in existing apartments on a scale of 0 to 100. The index and all its components are scaled so that a number above 50 indicates more respondents report that occupancy is good than report it is poor. While the reading of 74 indicates existing apartment owners are positive about occupancy overall, it is significantly weaker than it was a year ago.
The MOI is a weighted average of three built-for-rent market segments (garden/low-rise, mid/high-rise and subsidized). Although all three components declined year-over-year, they all remained above the break-even point of 50. The component measuring garden/low-rise units fell seven points to 77, the component measuring mid/high-rise units dropped 11 points to 62 and the component measuring subsidized units decreased eight points to 82.
“Multifamily developer sentiment is currently constrained by regulatory barriers and difficulty obtaining financing,” said Kip Lewis, director of construction management at OCCH in Columbus, Ohio, and chairman of NAHB’s Multifamily Council. “The recently enacted 21st Century ROAD to Housing Act should provide some help with respect to these challenges, but these policies will take time to implement. Meanwhile, rental housing demand is being supported by improving job growth during the second quarter of 2026.”
“It is clear that supply-side headwinds continue to weigh on multifamily developer sentiment,” said NAHB Chief Economist Robert Dietz. “In addition to relatively high interest rates and other financing issues, developers are finding it difficult to obtain approvals and utility connections in some parts of the country. High material prices and shortages of skilled labor also remain significant impediments.”
The MMS was re-designed in 2023 to produce results that are easier to interpret and consistent with the proven format of other NAHB industry sentiment surveys. Until there is enough data to seasonally adjust the indices, changes in the MPI and MOI should only be evaluated on a year-over-year basis.
For more recent information about the market, the survey contains a separate question asking multifamily developers to compare current market conditions to conditions three months earlier. In the second quarter of 2026, 14% of respondents said the current market is better, and 15% said it is worse. However, the majority of developers—71%—said that the market is currently about the same as it was three months ago.
For additional information on the MMS, visit nahb.org/mms.
For more information on the NAHB Multifamily program, please visit NAHB Multifamily.
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