NAHB: Multifamily Developer Confidence Down in Q2

(Image courtesy of NAHB; Breakout image courtesy of Pixabay/pexels.com)

The National Association of Home Builders, Washington, released its Multifamily Market Survey, finding that overall, multifamily developer confidence is down in the second quarter, although opinions about occupancy remain more positive.

The MMS contains two indexes—the Multifamily Production Index and the Multifamily Occupancy Index.

“There is no doubt that interest costs and limited financing availability are making it difficult to develop multifamily properties,” said NAHB Chief Economist Robert Dietz. “However, financial markets may become more stable later in the year, as recent weak economic data make it more likely the Fed will cut interest rates.”

The MPI

The Multifamily Production Index had a reading of 44, down 12 points-year-over-year.

The MPI measures builder and development sentiment about current production conditions in the apartment and condo market. Below 50 indicates more respondents report conditions are poor than good.

It shows a weighted average of four market segments. Garden/low-rise apartments fell 11 points to 53; mid/high-rise units fell 18 points to 29; subsidized units was down four points to 51; and built-for-sale units fell seven points to 38.

The MOI

The MMS also contains the Multifamily Occupancy Index, which stood at 81, down eight points year-over year. The MOI measures the industry’s perception of occupancies in existing apartments, and a reading above 50 indicates more respondents believe occupancy is good.

While 81 is a positive result, it is weaker than last year. By component, garden/low-rise units fell nine points to 82, mid/high-rise units fell seven points to 76 and subsidized units fell six points to 85.