New multifamily housing confidence weakened year-over-year in the third quarter, according to the Multifamily Market Survey (MMS) by the National Association of Home Builders (NAHB). The MMS produces two separate indices. The Multifamily Production Index (MPI) had a reading of 41, down five points year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 69, also down five points year-over-year.
Developer sentiment for new multifamily production has softened, due to challenges such as high interest rates, construction costs that are high relative to rents, and problems getting projects approved and connected to roads and utilities, resulting in many projects taking longer to complete. Due to the headwinds facing the industry, NAHB’s 2027 forecast shows a decline for multifamily starts. Although the administration’s regulatory reform efforts are helping to ease some cost pressures, the multifamily sector would still benefit from an expedited permit process and lower rates on development and construction loans.
Multifamily Production Index (MPI)
The MMS asks multifamily developers to rate the current conditions as “good”, “fair”, or “poor” for multifamily starts in markets where they are active. The index and all its components are scaled so that a number above 50 indicates that more respondents report conditions as good rather than poor. 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 the built-for-sale (or condominium) market.
All four components experienced decreases year-over-year and are in negative territory (i.e., below 50) during the third quarter. The component measuring subsidized units fell six points to 49, the component measuring garden/low-rise dropped five points to 48, and both the component measuring mid/high-rise units and the component measuring built-for-sale units decreased four points to 33 and 31, respectively.
Multifamily Occupancy Index (MOI)
The survey also asks multifamily property owners to rate the current conditions for occupancy of existing rental apartments in markets where they are active as “good”, “fair”, or “poor”. Like the MPI, the MOI and all its components are scaled so that a number above 50 indicates more respondents report that occupancy is good than poor. The MOI is a weighted average of three built-for-rent market segments (garden/low-rise, mid/high-rise, and subsidized).
Two of the three components experienced declines year-over-year for the third quarter of 2026. The mid/high-rise component declined seven points to 59 and the garden/low-rise component fell six points to 70. The component measuring subsidized units saw an increase of two points to 83. Nevertheless, all three components remained above the break-even point of 50.
Changes in Overall Market Conditions
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 series, changes in the MMS indices 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 third quarter of 2026, 6% of respondents said the current market is better, and 28% said it is worse. However, the majority of developers—66%—said that the market is currently about the same as it was three months ago.
Please visit NAHB’s MMS web page for the full report.