NAHB survey shows production sentiment below neutral even as occupancy remains solid, with garden-style properties outperforming high-rises.
Multifamily developer confidence was down in the fourth quarter of 2025, according to the National Association of Home Builders’ (NAHB’s) Multifamily Market Survey. The Multifamily Production Index (MPI) had a reading of 45, down three points year over year, while the Multifamily Occupancy Index (MOI), at 74, was down seven points year over year.
The MPI measures builder and developer sentiment about conditions in the apartment and condo market on a scale of 0 to 100. According to the NAHB, the index and all of its components are scaled so that a number below 50 indicates more respondents are reporting that conditions are getting worse rather than improving.
The MPI is a weighted average of four key market segments: three in the build-to-rent market—garden/low-rise, mid/high-rise, and subsidized—and the build-for-sale, or condo, market.
- Garden/low-rise: Increased two points to 54;
- Mid/high-rise: Fell eight points to 31;
- Subsidized: Decreased five points to 47; and
- Build-for-sale: Dropped six points to 36.
“Multifamily developers are somewhat less optimistic than they were at this time last year—except the market segment for garden or low-rise apartments,” said Debra Guerrero, senior vice president of strategic partnerships and government affairs at The NRP Group and chairman of NAHB’s Multifamily Housing Council. “Elevated construction costs and the local regulatory environment continue to be major headwinds to faster growth. While interest rates have eased slightly, they still need to come down further to significantly spur new construction.”
The MOI’s reading of 74 indicates apartment owners are positive about occupancy overall. The MOI measures the multifamily industry’s perception of occupancies in existing apartments. It is a weighted average of current occupancy indexes for garden/low-rise, mid/high-rise, and subsidized and can vary from 0 to 100, with a break-even point at 50, where higher numbers indicate occupancy is good. All three indexes dropped year over; however, they remained above the break-even point. The garden/low-rise component fell five points to 76, the mid/high-rise component decreased 12 points to 62, and the component for subsidized units was down three points to 88.
“Both the MPI and MOI in the fourth quarter indicated that the multifamily market is substantially stronger for garden and low-rise buildings than for mid- and high-rise,” said NAHB chief economist Robert Dietz. “This suggests that the 2025 trend of gains in multifamily market share for outlying metro and non-metro counties—where garden and low-rise structures are more common—is likely to continue in 2026.”
In addition, 14% of respondents in the fourth quarter said the market is better, while 18% said it is worse. However, the majority, 68%, cited conditions being roughly the same as it was three months ago.