The mood of the nation’s multifamily developers is very much on the pensive side, according to a new industry survey.
The most recent Multifamily Production Index, which is produced by the National Association of Home Builders, showed a middling 40, on a scale of zero to 100, with readings over 50 indicating that builders and developers are feeling positive about current conditions.
Measuring moods and attitudes in several different categories, the Index reported a 48 response in the built-for-rent sector; with mid/high-rise unit developers showing a 28 mark; and subsidized unit development at 46.
In a statement, Tom Tomaszewski, chairman of the NAHB’s Multifamily Council, remarked that “construction costs, the cost and access to financing, and the availability of land and regulations remain significant obstacles to new multifamily development.”
The numerical results of the Index reading reveal conditions that have been generally challenging for the most part of a year. The last quarter 2023 reading came in with an overall 41, while the built-for-rent sector stood at 43; the mid/high-rise unit sector came in at 26; and subsidized unit development at 41.
The last overall reading above 50 was recorded in the spring of 2023, with an index showing of 56.
Robert Dietz, NAHB chief economist, remarked in a press release that the current down market may be around for a while longer.
“We expect multifamily construction to remain week for another year as the market works through a substantial number of units under construction,” said Dietz, adding that more positive long-term trends should become apparent “toward the end of 2025.”
November 8, 2024
By Garry Boulard
