NMHC Survey Finds Long-Term Development Optimism

Article originally posted on HERE on December 30, 2025

The National Multifamily Housing Council’s (NMHC’s) quarterly survey of leading construction and development firms in December finds apartment starts remaining relatively stable compared with three months ago.

According to the survey, conducted between Dec. 4 and 15, 43% of respondents reported starts to be relatively unchanged, while 25% said their firms started fewer projects and 26% started a greater number of projects.

Respondents also reported an easing of delays. For those with projects already started, 30% and 51% reported fewer construction delays or relatively unchanged levels, respectively.

“Starts have pulled back drastically over the past two years amid high interest rates and slowing rent growth,” noted chief economist Chris Bruen. “Yet, builders and developers are currently reporting lower costs for construction materials and labor and have expressed optimism about their long-term prospects.”

One-third of respondents noted the cost of construction labor had decreased or increased at a slower rate than inflation over the past three months, while only 7% cited labor costs increasing faster than the rate of inflation. In addition, 25% reported that the costs for construction materials have decreased or increased at a slower rate than inflation over the same time period; only 5% said they thought material costs had increased at a faster rate than inflation.

Looking ahead, 35% respondents do expect labor costs to increase faster than the rate of inflation over the next six to 12 months, while 45% believe they will remain about the same or keep pace with inflation. Over one-third, 35%, also expect material costs to increase faster than the rate of inflation, while 40% said they expect costs to keep pace with inflation.

While the majority of respondents, 77%, said they think multifamily construction conditions will remain the same over the next three months, they are more optimistic for the long term. Over two-thirds, 70%, said they expect long-term conditions to improve, while only 4% said they expect declining conditions.