Article originally posted on Multifamily Executive on September 28, 2026

Increasing construction costs, economic uncertainty, and low rent growth continue to hamper multifamily developers and builders. However, they remain optimistic about overall construction conditions as they look ahead to next year, according to the National Multifamily Housing Council’s (NMHC’s) quarterly survey of leading construction and development firms conducted in September.

“Low rent growth combined with an uptick in interest rates and rising costs for labor and materials is making multifamily development more difficult to pencil,” said Chris Bruen, NMHC’s senior director of research and chief economist. “Yet, despite these challenges, survey respondents remain largely optimistic in their outlook about construction conditions over the next six to 12 months, and nearly a quarter reported actually starting more projects compared with two months ago.”

In the quarterly survey, 29% of respondents said they started fewer projects compared with three months ago, up from 20% in June, while 24% said their firms started more projects. For those reporting fewer starts, 65% attributed it to economic uncertainty or developments not being financially feasible. In addition, 59% of those with fewer starts cited low rent growth as a reason.

A third of respondents said the cost of construction materials has increased faster than the rate of inflation over the past three months, while 22% said the cost of construction labor also has increased faster than the rate of inflation. About half reported that construction materials and labor costs have tracked inflation. Only 12% reported a real decrease in materials costs, while 19% said they believe labor costs have dropped.

Looking ahead, survey respondents said they anticipate a pullback in equity financing over the next three months, with 25% expecting it to become less available. However, 39% noted they believe equity financing will become more available over the next six to 12 months, while only 16% expect a decline.

Respondents are more optimistic about debt financing for the short and longer term. Sixteen percent of respondents said they expect it to become more available in the next three months versus 9% who said less available. Nearly a third, 31%, said they also expect greater availability for debt financing over the next six to 12 months.