According to the National Association of Home Builders’ Multifamily Market Survey (MMS), multifamily developers’ confidence in the market grew in the second quarter of 2025.
The MMS generates two different indices. The Multifamily Production Index (MPI) rose two points year on year to 46.
The Multifamily Occupancy Index (MOI) was 82, a one-point increase from last year.
The subsidized subcomponent contributed significantly to a small improvement in multifamily developer confidence over the previous year.
This is due in part to excitement about the expansion of federal affordable housing resources resulting from the recently passed legislative reconciliation package.
However, high mortgage rates, growing construction costs, limited land availability, and stringent local laws remain major challenges in several areas of the country.
Even with these obstacles, multifamily starts are becoming less constricted as the number of apartments under construction decreases and stabilizes.
As a result, NAHB expects starts to be somewhat higher in 2025 than in 2024, but significantly below levels seen in 2023.
Multifamily Production Index (MPI)
The MMS requests that multifamily developers rank current conditions as “good,” “fair,” or “poor” for multifamily starts in markets where they are operating.
The measure and its components are scaled so that a score greater than 50 indicates that more respondents rate conditions as favorable rather than poor.
The MPI is a weighted average of four important market segments: three built-for-rent (garden/low-rise, mid/high-rise, and subsidized) and one built-for-sale (or condominium).
Two components had year-over-year increases: the component measuring subsidized units surged 10 points to 61, while the component measuring mid/high-rise rose seven points to 36.
The component measuring garden/low-rise and built-to-sale units declined three points year on year to 50 and 35, respectively.
Multifamily Occupancy Index (MOI)
The study also asks multifamily property owners to rank the current occupancy conditions of existing rental apartments in active markets as “good,” “fair,” or “poor.”
Like the MPI, the MOI and all of its components are scaled so that a score greater than 50 indicates that more respondents report good occupancy than low occupancy.
The MOI represents a weighted average of three built-for-rent market groups (garden/low-rise, mid/high-rise, and subsidized).
Two of the three MOI components showed year-over-year growth in the second quarter of 2025.
The component measuring subsidized units increased by five points to 90, while the garden/low-rise component increased two points to 84. Meanwhile, the component that measures mid/high-rise apartments dropped three points to 73.
Nonetheless, all three MOI components remain significantly higher than the break-even value of 50.
The MMS was redesigned in 2023 to yield more interpretable data while remaining consistent with the proven framework of other NAHB industry sentiment surveys.
Until there is enough data to seasonally correct the series, changes in the MMS indices should only be compared year to year.
For the whole report, please visit the NAHB’s MMS website.
[Read more about this topic on Eyeonhousing.org]