Multifamily builders are beginning the 12 months in a cautious state, based on Q1 2025 outcomes from the Multifamily Market Survey (MMS) launched right now by the Nationwide Affiliation of Residence Builders (NAHB). The MMS produces two separate indices. The Multifamily Manufacturing Index (MPI) decreased three factors to 44 year-over-year, marking the seventh consecutive quarter under the break-even level of fifty. The Multifamily Occupancy Index (MOI) had a studying of 82, barely decrease than the 83 studying it recorded within the first quarter of 2024.
The present MPI studying is in keeping with NAHB’s forecast for a modest decline within the fee of multifamily manufacturing for the rest of 2025, adopted by a modest restoration in 2026. Multifamily builders and builders proceed to expertise main headwinds from rising building prices, regulatory limitations, and availability of financing.
Like remodelers and single-family builders, multifamily builders are additionally being affected by financial coverage uncertainty. On this quarter’s MMS, greater than half of the builders reported that their suppliers have elevated costs as a result of introduced, enacted or anticipated tariffs.
Multifamily Manufacturing Index (MPI)
The MMS asks multifamily builders to fee the present situations as “good”, “honest”, or “poor” for multifamily begins in markets the place they’re lively. The index and all its parts are scaled so {that a} quantity above 50 signifies that extra respondents report situations pretty much as good somewhat than poor. The MPI is a weighted common of 4 key market segments: three within the built-for-rent market (backyard/low-rise, mid/high-rise, and sponsored) and the built-for-sale (or condominium) market.
Three of the 4 parts skilled year-over-year decreases: the element measuring mid/high-rise models fell eight factors to twenty-eight and the parts measuring backyard/low-rise and built-for-sale models each dipped by one level to 54 and 38, respectively. The element measuring sponsored models was unchanged at 50 year-over-year.
Multifamily Occupancy Index (MOI)
The survey additionally asks multifamily property homeowners to fee the present situations for occupancy of present rental flats, in markets the place they’re lively, as “good”, “honest”, or “poor”. Just like the MPI, the MOI and all its parts are scaled so {that a} quantity above 50 signifies extra respondents report that occupancy is nice than report it as poor. The MOI is a weighted common of three built-for-rent market segments (backyard/low-rise, mid/high-rise and sponsored).
Two of the three MOI parts skilled year-over-year declines within the first quarter of 2025. The element measuring sponsored models dropped by 5 factors to 89 and the backyard/low-rise element decreased two factors to 82. In the meantime, the element measuring mid/high-rise models rose two factors to 76. Regardless of the declines, all three MOI parts stay effectively above the break-even level of fifty.
The MMS was re-designed in 2023 to supply outcomes which might be simpler to interpret and in keeping with the confirmed format of different NAHB business sentiment surveys. Till there may be sufficient knowledge to seasonally regulate the collection, adjustments within the MMS indices ought to solely be evaluated on a year-over-year foundation.
Please go to NAHB’s MMS net web page for the complete report.
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