Confidence among builders and developers in the new multifamily housing market declined year-over-year in the fourth quarter of 2025, according to the Multifamily Market Survey (MMS) from the National Association of Home Builders (NAHB). The survey, which measures sentiment through two indices, showed that the Multifamily Production Index (MPI) dropped three points to 45, while the Multifamily Occupancy Index (MOI) decreased seven points to 74.
The MPI tracks builder and developer perceptions of current conditions in apartment and condominium construction on a scale from 0 to 100. Scores below 50 indicate more respondents view conditions as poor rather than good. The index includes four key segments: garden/low-rise, mid/high-rise, subsidized rental units, and built-for-sale condominiums. Of these, only garden/low-rise apartments saw improvement, increasing by two points to 54. Other segments fell below the break-even mark: mid/high-rise dropped eight points to 31; subsidized units declined five points to 47; and built-for-sale units fell six points to 36.
The MOI reflects industry views on occupancies in existing apartments. A score above 50 signals positive sentiment about occupancy levels. While all components declined compared with last year, each remained above this threshold. Garden/low-rise units decreased five points to 76; mid/high-rise fell twelve points to 62; subsidized units dipped three points to 88.
“Multifamily developers are somewhat less optimistic than they were at this time last year—except in 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 in San Antonio and chairman of NAHB’s Multifamily 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.”
NAHB Chief Economist Robert Dietz added: “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. 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.”
The MMS was redesigned in 2023 for easier interpretation and alignment with other NAHB industry surveys. Year-over-year changes remain the primary basis for analysis until enough data become available for seasonal adjustment.
In response to a separate question on recent market changes, most developers reported stability over the previous three months: 14% said conditions improved, while 18% noted deterioration; however, a majority—68%—felt that conditions remained about the same.
NAHB functions as a trade association supporting professionals across residential construction by providing advocacy, education opportunities, networking resources, policy support aimed at affordability and innovation, professional development tools, event hosting for members’ connections, assistance for local associations, recognition programs for design excellence—and maintains a nationwide network as described on its official website.
Further details about MMS can be found at nahb.org/mms.
