Confidence in the market for new multifamily housing increased year-over-year in the third quarter, according to the Multifamily Market Survey (MMS) released today by the National Association of Home Builders (NAHB). The MMS produces two separate indices. The Multifamily Production Index (MPI) had a reading of 46, up six points year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 74, down one point year-over-year.

The MPI measures builder and developer sentiment about current production conditions in the apartment and condo market on a scale of 0 to 100. The index and all its components are scaled so that a number below 50 indicates that more respondents report conditions are poor than report conditions are good.

The MPI is a weighted average of four key market segments: three in the built-for-rent market (garden/low-rise, mid/high-rise and subsidized) and one in the built-for-sale (or condominium) market. The component measuring garden/low-rise increased three points to 51, the component measuring mid/high-rise units increased nine points to 37, the component measuring subsidized units rose nine points to 55, and the component measuring built-for-sale units posted a six-point gain to 35.

The MOI measures the multifamily housing industry’s perception of occupancies in existing apartments on a scale of 0 to 100. The index and all its components are scaled so that a number above 50 indicates more respondents report that occupancy is good than report it is poor. The reading of 74 indicates existing apartment owners are positive about occupancy overall, but this is the lowest reading recorded over the last 11 quarters on this measure. Sentiment for mid/high-rise apartments is noticeably weaker than it is for the other two rental market segments.

The MOI is a weighted average of three built-for-rent market segments (garden/low-rise, mid/high-rise and subsidized). The component measuring garden/low-rise units dipped one point to 76, the component measuring mid/high-rise units held steady at 66 and the component measuring subsidized units dropped five points to 81.

“We are seeing a degree of bifurcation in the multifamily market, as developers of low-rise market-rate and subsidized rental properties express increased optimism, while developers of mid- and high-rise properties and condominiums remain less confident,” 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. “Significant challenges such as the current regulatory environment, rising construction costs and difficulties in securing project financing continue to affect the multifamily sector as a whole.”

“The MPI and MOI are giving us a mixed picture of the multifamily market, with strength in some market segments, but weakness concentrated in the mid-to-high-rise developments that tend to be common in high-density metro areas,” said NAHB Chief Economist Robert Dietz. “This is consistent with NAHB’s Home Building Geography Index, which shows multifamily construction activity growing in areas with low population densities but weakening in the larger metros.”

The MMS was re-designed in 2023 to produce results that are easier to interpret and consistent with the proven format of other NAHB industry sentiment surveys. Until there are enough data to seasonally adjust the indices, changes in the MPI and MOI should only be evaluated on a year-over-year basis.

For more recent information about the market, the survey contains a separate question asking multifamily developers to compare current market conditions to conditions three months earlier. In the third quarter of 2025, 10% of respondents said the current market is better, and 22% said it is worse. However, the vast majority of developers—68%—said that the market is currently about the same as it was three months ago.

For additional information on the MMS, visit nahb.org/mms.

For more information on the NAHB Multifamily program, please visit NAHB Multifamily.