The Confidence of Multifamily Developers has Increased, Although it Remains Negative

Date:

According to the results of the Multifamily Market Survey (MMS) issued today by the National Association of Home Builders, while the two key confidence indices for multifamily housing climbed marginally in the fourth quarter, they both remained in negative territory (NAHB).

The MMS generates two distinct indices. The Multifamily Production Index (MPI) rose two points to 34 in the most recent quarter, while the Multifamily Occupancy Index (MOI) rose four points to 49.

On a scale of 0 to 100, the MPI assesses builder and developer attitude on current production conditions in the apartment and condo market. The index and all of its components are scaled so that a figure less than 50 indicates that more respondents report that conditions are deteriorating than improving.

The MPI is a weighted average of three key elements of the multifamily housing market: the construction of low-rent units (apartments supported by low-income tax credits or other government subsidy programs); market-rate rental units (apartments built to be rented at the market rate); and for-sale units (condominiums). The component measuring low-rent apartments climbed by five points to 41, the component measuring market rate apartments decreased by one point to 38, and the component measuring for-sale units stayed same at 23.

The MOI assesses the perception of occupancies in existing apartments in the multifamily housing market. It is a weighted average of current occupancy indexes for class A, B, and C multifamily units with a range of 0 to 100, with a break-even threshold of 50, and lower numbers indicating decreased occupancy. The MOI rose four points to 49, indicating that the market is nearing stability.

“Many developers continue to see strong demand for multifamily housing, but in some markets supply is catching up to demand,” Lance Swank, president and co-owner of Sterling Group, Inc. in Mishawaka, Ind., and chairman of NAHB’s Multifamily Council, made the statement. “In most markets, developers face challenges with regulatory costs and delays, and obtaining financing for new construction.”

“It is appropriate that multifamily developers are expressing some caution and that the MPI remains below 50, given the way starts have been outpacing completions,” NAHB Chief Economist Robert Dietz stated. “This is also consistent with NAHB’s forecast that multifamily production will slow measurably from the very strong rates it sustained through most of 2022.”


Amazing Builder Partners



Phil Garcia
Phil Garcia
Phil is one of our main correspondents based out of Providence, Rhode Island.

Popular

Share post:

More like this
Related

Westlake Royal Donates Siding, Trim to Accessible Home Remodel

Westlake Royal Building Products USA Inc. (Westlake Royal), a...

First Coastal Exteriors Joins Beacon

Beacon announced the completion of its acquisition of First...

MoistureShield Expands Distribution

MoistureShield, an Oldcastle APG hallmark brand, is teaming up...

Accoya USA sets ground on a new facility in Tennessee

Accoya USA LLC started work on its US production...

RoyOMartin invests $9.5M to modernize manufacturing facility in Louisiana

Martco, LLC, the parent company of RoyOMartin, a third-generation,...

TopBuild Corp. will purchase Specialized Products and Insulation

TopBuild Corp., an installer and specialist distributor of insulation...

R.P. Lumber Acquires the Sparta Facility of Wright Construction Supplies

Wright Building Center, a long-time industry presence in southern...

Single-family Starts Post Unexpected Gain in September

Despite high mortgage rates averaging more than 7%, single-family...

Consumers’ Confidence Stalled Despite Concerns about the Future

This pessimism was mostly caused by ongoing inflation, particularly...

Manion’s Wholesale joins Tando Composites in Expanding Distribution

Derby Building Products has announced that Manion's Wholesale Building...

Lugbill Supply Center celebrates grand reopening event

On September 23, Lugbill Supply Center in Archbold, Ohio,...

Boise Cascade expands its distribution network in two additional markets.

The Building Materials Distribution branch of Boise Cascade has...

Zillow Partners with Redfin for New Construction Listings

New-construction listings from Zillow Group will soon be automatically...

Mead Lumber Begins A Rebranding Initiative

Mead Lumber announced a rebranding project that includes a...

A Monthly Mortgage Payment of $3,000 has Become the Standard

In today's housing market, $3,000 monthly mortgage payments are...

JELD-WEN One of Newsweek’s Most Trustworthy Companies for 2023

For the second year in a row, JELD-WEN Holding,...