More than half of the multifamily developers surveyed by the National Association of Home Builders reported that their suppliers have increased prices because of the Trump administration’s announced, enacted or anticipated tariffs.
The 1Q 2025 Multifamily Market Survey gauged developers’ confidence in the market by two metrics: the Multifamily Production Index (MPI) and the Multifamily Occupancy Index (MOI).
The NAHB survey returned a score of 44 on its Multifamily Production Index (MPI) – four points below its level in 4Q 2024. A score below the breakeven point of 50 indicates that builders lack enough confidence in the market to consider building again. This was the seventh consecutive quarter since 3Q 2023 that the MPI failed to rise to 50 or above.
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The MPI for garden/low-rise apartments rose slightly from 52 to 54 between 4Q 2024 and 1Q 2025. However, the index for mid/high-rise apartments fell from 39 to 28, subsidized apartments went from 52 to 50 and built-for-sale condominiums went from 42 to 38.
“The MPI of 44 is consistent with NAHB’s forecast for a modest decline in the rate of multifamily production for the remainder of 2025, followed by a modest recovery in 2026,” said Robert Dietz, NAHB’s chief economist. “Like remodelers and single-family builders, multifamily developers are being affected by rising costs and economic policy uncertainty.” He added that a majority of developers said they were encountering higher prices from their suppliers because of tariff fears.
In addition, developers and builders still face challenges from rising construction costs, regulatory barriers, and availability of financing, the report said.
The MOI score was 82, one point higher than in 4Q 2024 but one point lower than in 1Q 2024. There were slight increases in the MOI for garden/low-rise apartments and mid/high-rise. The number for subsidized housing dipped from 91 to 89 between quarters but remained unchanged at 50 year-over-year. All three components remained well above the breakeven point of 50. “The reading of 82 indicates existing apartment owners are positive about occupancy,” NAHB said.
Asked how overall market conditions have changed, respondents seemed somewhat more positive than in the prior quarter or previous year. Conditions were viewed as better by 14% (compared to 10% and 9%) and about the same by 70% (compared to 69% and 64%). The share who perceived conditions as worse fell to 16% (compared to 21% and 27%).
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