NAHB: Multifamily Sentiment Holds Steady, But Occupancy Softens

Article originally posted on Multifamily Executive on May 7, 2026

Multifamily developer confidence was mixed in the first quarter, according to the National Association of Home Builders’ (NAHB’s) Multifamily Market Survey. The Multifamily Production Index (MPI) had a reading of 44, unchanged year over year, while the Multifamily Occupancy Index (MOI), at 69, was down 13 points year over year.

The MPI measures builder and developer sentiment about conditions in the apartment and condo market on a scale of 0 to 100. According to the NAHB, the index and all of its components are scaled so that a number below 50 indicates more respondents are reporting that conditions are getting worse rather than improving.

The MPI is a weighted average of four key market segments: three in the build-to-rent market—garden/low-rise, mid/high-rise, and subsidized—and the build-for-sale, or condo, market.

• Garden/low-rise: Decreased six points to 48;
• Mid/high-rise: Increased seven points to 35;
• Subsidized: Rose six points to 56, the only component above the break-even mark; and
• Build-for-sale: Inched down one point to 37.

“Multifamily developer sentiment is roughly where it was at this time last year, although the combination of regulatory hurdles, interest rates, insurance costs, and volatility in material prices is threatening the viability of some projects,” said Kip Lewis, director of construction management at OCCH in Columbus, Ohio, and chairman of NAHB’s Multifamily Council. “Also, in some markets, developers are reporting that it has become more difficult to obtain permits for unsubsidized projects.”

The MOI’s reading of 69 indicates apartment owners are positive about occupancy overall. The MOI measures the multifamily industry’s perception of occupancies in existing apartments. It is a weighted average of current occupancy indexes for garden/low-rise, mid/high-rise, and subsidized and can vary from 0 to 100, with a break-even point at 50, where higher numbers indicate occupancy is good. All three indexes dropped year over; however, they remained above the break-even point. The garden/low-rise component fell 11 points to 71, the mid/high-rise component decreased 17 points to 59, and the component for subsidized units was down nine points to 80.

“The MPI and MOI continue to show that the market for garden and low-rise apartments typical of outlying areas is stronger than the market for mid- and high-rise apartments,” said NAHB chief economist Robert Dietz. “The gap is narrowing year over year for new multifamily construction, however, while widening for the occupancy of existing apartments. NAHB is projecting that multifamily starts will increase slightly in 2026, but current production rates are unlikely to be sustained through 2027.”

In addition, 21% of respondents in the first quarter said the market is better, while 19% said it is worse. The majority, 60%, cited conditions being roughly the same as it was three months ago.