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Multifamily Developer Confidence Weakens in Third Quarter – Eye On Housing

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New multifamily housing confidence weakened year-over-year in the third quarter, according to the Multifamily Market Survey (MMS) by the National Association of Home Builders (NAHB). The MMS produces two separate indices. The Multifamily Production Index (MPI) had a reading of 41, down five points year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 69, also down five points year-over-year.

Developer sentiment for new multifamily production has softened, due to challenges such as high interest rates, construction costs that are high relative to rents, and problems getting projects approved and connected to roads and utilities, resulting in many projects taking longer to complete. Due to the headwinds facing the industry, NAHB’s 2027 forecast shows a decline for multifamily starts. Although the administration’s regulatory reform efforts are helping to ease some cost pressures, the multifamily sector would still benefit from an expedited permit process and lower rates on development and construction loans.

Multifamily Production Index (MPI)

The MMS asks multifamily developers to rate the current conditions as “good”, “fair”, or “poor” for multifamily starts in markets where they are active. The index and all its components are scaled so that a number above 50 indicates that more respondents report conditions as good rather than poor. 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 the built-for-sale (or condominium) market.

All four components experienced decreases year-over-year and are in negative territory (i.e., below 50) during the third quarter. The component measuring subsidized units fell six points to 49, the component measuring garden/low-rise dropped five points to 48, and both the component measuring mid/high-rise units and the component measuring built-for-sale units decreased four points to 33 and 31, respectively.

Multifamily Occupancy Index (MOI)

The survey also asks multifamily property owners to rate the current conditions for occupancy of existing rental apartments in markets where they are active as “good”, “fair”, or “poor”.  Like the MPI, the MOI and all its components are scaled so that a number above 50 indicates more respondents report that occupancy is good than poor. The MOI is a weighted average of three built-for-rent market segments (garden/low-rise, mid/high-rise, and subsidized). 

Two of the three components experienced declines year-over-year for the third quarter of 2026. The mid/high-rise component declined seven points to 59 and the garden/low-rise component fell six points to 70. The component measuring subsidized units saw an increase of two points to 83. Nevertheless, all three components remained above the break-even point of 50.

Changes in Overall Market Conditions

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 is enough data to seasonally adjust the series, changes in the MMS indices 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 2026, 6% of respondents said the current market is better, and 28% said it is worse. However, the majority of developers—66%—said that the market is currently about the same as it was three months ago.

Please visit NAHB’s MMS web page for the full report.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Student Housing Construction Rises in the Third Quarter – Eye On Housing

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Private fixed investment in student dormitories rose 2.6% in the third quarter of 2026, reaching a seasonally adjusted annual rate (SAAR) of $3.8 billion. This gain marked a second consecutive quarterly increase, despite continued pressures from elevated interest rates. On a year-over-year basis, investments in dorms increased 1.1%.

Private fixed investment in student housing experienced a surge after the Great Recession, as college enrollment increased from 17.2 million in 2006 to 20.4 million in 2011. However, during the pandemic, private fixed investment in student housing declined drastically from $4.4 billion (SAAR) in the last quarter of 2019 to $3.1 billion in the second quarter of 2021. According to the National Student Clearinghouse Research Center, college enrollment fell by 3.6% in the fall of 2020 and by 3.1% in the fall of 2021. The latest preliminary data indicated that college enrollment held steady in fall 2026 compared with the previous year.

Since the pandemic, private fixed investment in dorms has rebounded alongside a gradual recovery in college enrollments. Effective in-person learning requires college students to return to campuses, boosting the student housing sector. Still, demographic trends are reshaping the outlook for student housing. The U.S. faces slower growth in the college-age population as birth rates declined following the Great Recession. Furthermore, changing perceptions towards the value of a college degree as a guaranteed pathway to job security are all contributing to an “enrollment cliff”. According to the National Center for Education Statistics, total enrollment in postsecondary institutions is projected to only increase approximately 2% from 2026 to 2031, well below the 37% increase between 2000 and 2010.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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U.S. Economy Accelerated in the Third Quarter of 2026 – Eye On Housing

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The U.S. economy grew at a faster pace in the third quarter of 2026, supported by stronger consumer spending, robust business investment, and increased government spending. However, residential investment remained a weak spot, highlighting the continued challenges facing the housing sector amid elevated borrowing costs.

According to the “advance” estimate released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) expanded at an annual rate of 3.4% in the third quarter, up from a 2.2% increase in the second quarter of 2026. The acceleration suggests that overall economic activity strengthened during the summer, although the advance estimate remains subject to revision.

The latest GDP report also showed that inflationary pressures eased in the third quarter. The price index for gross domestic purchases rose 3.0% in the third quarter, down from 5.6% in the second quarter. The Personal Consumption Expenditures (PCE) Price Index, which measures inflation (or deflation) across various consumer expenses and reflects changes in consumer behavior, increased 2.1%, compared with a 5.0% increase in the previous quarter. Excluding food and energy, the core PCE price index increased 2.5%, easing from 3.3% in the second quarter.

Breaking down the third-quarter data further, growth in real GDP primarily reflected gains in consumer spending, investment, and government spending, which were partly offset by a decrease in exports. Imports, which are a subtraction in the calculation of GDP, increased during the quarter.

Consumer spending, the backbone of the U.S. economy, increased at an annual rate of 3.8% in the third quarter, following a similar pace of growth in the second quarter. The increase in consumer spending reflected increases in both services and goods.

Gross private domestic investment continued to support economic growth in the third quarter, particularly through strong business investment in equipment and intellectual property products. Investment associated with artificial intelligence and information-processing equipment contributed to the expansion, while residential investment remained weak.

Nonresidential fixed investment increased 12.7% in the third quarter. Strong gains in equipment (+20.9%) and intellectual property products (+8.8%) supported business investment. Meanwhile, residential fixed investment (RFI) declined 3.3%. Within the residential category, investment in single-family permanent site structures decreased 5.0% at an annual rate, multifamily permanent site structures rose 0.3%, and spending on improvements rose 2.7%.

Government spending increased 5.3% in the third quarter, contributing to the acceleration in overall economic growth.

Trade activity was a drag on GDP growth in the third quarter. Exports declined, while imports increased. Because imports are subtracted from GDP, the increase in imports further weighed on headline growth, partly offsetting the positive contributions from consumer spending, investment, and government spending.

For the common BEA terms and definitions, please access bea.gov/Help/Glossary.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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A Quarter of Remodelers Started ADUs Over Past Twelve Months – Eye On Housing

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When asked if remodelers started a project involving an Accessory Dwelling Unit (ADU) over the past twelve months, 24% indicated that they were building an addition for use as an ADU and 23% indicated that they were converting an existing space to an ADU, according to NAHB’s Remodeling Market Index (RMI). While the percentage shares for each category rose compared to the last time NAHB asked the question in Q1 2019, a large majority of remodelers still did not start ADUs.

When looking at how each region answered this question, the Northeast was most likely to have remodelers constructing ADUs, with at least one-third indicating both project types (i.e., building an addition and converting existing space), followed by the West with at least 27% of remodelers for both types. Both regions have states with relatively nonrestrictive ADU laws to encourage further production. ADU projects were least likely to occur in the Midwest, with less than 20% of remodelers  engaging in this activity.

When asked about the evidence that helped them conclude that these projects involved an ADU, 71% indicated ‘Project involved building a detached structure,’, followed by ‘Renovated area has its own separate entrance’ (67%) and ‘Renovated area has its own kitchen facilities’ (58%). The largest change compared to Q1 2019 was for ‘Project involved building a detached structure,’ which rose 28 percentage points in Q3 2026.

Sixty-two percent of ADU projects cost $150,000 or more, which is more than double the share in Q1 2019 (28%). According to NAHB’s Remodeling Input Price Index (RIPI), input costs for remodelers are up over 51% from Q1 2019 to Q3 2026.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Remodeling Market Sentiment Remains Stable in Third Quarter Despite Headwinds – Eye On

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In the third quarter of 2026, the NAHB Remodeling Market Index (RMI) posted a reading of 62, up one point compared to the previous quarter. The RMI has remained within a narrow band between 59 and 70 for the past four years. Remodeler sentiment remains the standout sector within the housing industry, when compared to its single-family and multifamily counterparts.

Despite sentiment remaining stable, remodelers report that economic uncertainty is making some potential customers hesitant to move forward with projects. Labor shortages, exacerbated by immigration enforcement and competition from data center construction, are extending the time it takes to complete projects. Nevertheless, remodeling is gaining share in the overall construction market, as it is somewhat less sensitive than new construction to the current elevated interest rates. NAHB’s projection for remodeling activity will remain stable in 2026 and grow slightly in 2027, which is consistent with today’s reading.

The RMI is based on a survey that asks remodelers to rate various aspects of the residential remodeling market “good”, “fair” or “poor.” Responses from each question are converted to an index that lies on a scale from 0 to 100. An index number above 50 indicates a higher proportion of respondents view conditions as good rather than poor.

Current Conditions

The Remodeling Market Index (RMI) is an average of two major component indices: the Current Conditions Index and the Future Indicators Index. 

The Current Conditions Index is an average of three components: the current market for large remodeling projects ($50,000 or more), moderately-sized projects ($20,000 to $49,999), and small projects (under $20,000).

In the third quarter of 2026, the Current Conditions Index averaged 70, which remained unchanged for the third consecutive quarter. The component measuring large remodeling projects increased two points to 66, while the small projects component inched down one point to 73, and the moderately-sized projects component decreased two points to 71.

Future Indicators

The Future Indicators Index is an average of two components: the current rate at which leads and inquiries are coming in, and the current backlog of remodeling projects. 

In the third quarter of 2026, the Future Indicators Index averaged 54, up two points from the previous quarter. Both the component measuring backlog of remodeling jobs and the current rate at which leads and inquiries increased two points to 56 and 53, respectively, for the quarter.

For the full set of RMI tables, including regional indices and a complete history for each RMI component, please visit NAHB’s RMI web page.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Economic Growth Continued Across Most States in the Second Quarter – Eye On Housing

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Real gross domestic product (GDP) increased in 44 states and the District of Columbia in the second quarter of 2026, according to the latest estimates from the U.S. Bureau of Economic Analysis (BEA). State-level growth varied considerably during the quarter, with real GDP growth ranging from a 4.0% annualized increase in New York to a 2.3% decline in West Virginia. The results point to continued regional differences in economic performance, with most states recording positive economic growth despite ongoing pressures from elevated prices and interest rates.

Nationally, real GDP, measured at a seasonally adjusted annual rate, increased by 2.2% in the second quarter of 2026, led by real estate and rental and leasing, information, durable goods manufacturing, and finance and insurance. The leading offsets were decreases in transportation and warehousing, retail trade, and nondurable goods manufacturing.

Regionally, real GDP increased in all eight regions between the first and the second quarters of 2026. Growth was slightly less compared to the previous quarter, with regional gains ranging from a 1.5% increase in the Rocky Mountain region to a 2.9% increase in the Mideast.

New York posted the strongest increase in real GDP during the second quarter, with growth led by the finance and insurance industry. Delaware and South Carolina tied for second, each recording a 3.5% growth rate. Minnesota and Utah followed, with each posting a 3.4% growth rate. At the other end of the spectrum, West Virginia, Wyoming, Alaska, North Dakota, Kansas, and Nebraska recorded declines in real GDP. Mining was the leading contributor to the decreases in West Virginia and Wyoming. The divergence across states highlights the importance of industry composition in shaping regional economic performance, particularly for states with greater exposure to energy and commodity-related activity.

Overall, the state GDP data show that economic growth remained broad-based in the second quarter, although the pace of growth varied significantly across regions. For the housing market, differences in state-level economic activity can have important implications for housing demand, as stronger local economies generally support household income and employment, while weaker economic conditions can weigh on housing activity.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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House Price Appreciation by State and Metro Area in the Second Quarter of 2026 – Eye On

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U.S. house prices continued to rise in the second quarter of 2026, with most states and metropolitan areas recording annual gains. Elevated borrowing costs and affordability constraints remained important headwinds, while limited housing supply continued to support prices in many markets, particularly across parts of the Midwest and Northeast.

According to the Federal Housing Finance Agency’s (FHFA) quarterly purchase-only House Price Index (HPI), national house prices increased 2.1% in the second quarter of 2026 from a year earlier. This was slightly faster than the 1.9% annual gain reported for the first quarter. On a quarter-over-quarter basis, house prices rose 0.3%, moderating from the 0.6% increase in the previous quarter.

The FHFA’s purchase-only HPI tracks average price changes using more than six million repeat-sales transactions involving the same single-family properties. In addition to the national picture, the index provides valuable insight into house price trends across states and metropolitan areas.

At the state level, house price performance remained positive across most of the country. Among the 50 states and the District of Columbia, 47 states recorded year-over-year gains, while four posted declines. Thirty states matched or exceeded the national appreciation rate of 2.1%. Puerto Rico also registered an annual increase.

Alaska led the nation, with house prices rising 8.3% from a year earlier. Vermont followed with a 7.3% gain, while prices increased 5.8% in Hawaii. Illinois and West Virginia each posted gains of approximately 5.6%.

Other strong-performing states included Wisconsin and North Dakota, where prices rose about 4.8%, followed by Connecticut, Rhode Island, and New Jersey. Although the strongest gains were not concentrated in a single region, many Midwest and Northeast states continued to outperform the national average.

At the other end of the spectrum, New Mexico recorded the largest annual decline, with house prices falling 1.2%. Washington declined 0.9%, Colorado fell 0.5%, and California edged down 0.2%.

Several other states, including Oregon, North Carolina, Texas, Mississippi, and Arizona, recorded annual appreciation of less than 1%. These results point to continued softness in several Western and Sun Belt markets, including some areas that experienced rapid price growth during the pandemic-era housing boom.

Quarterly performance was similarly uneven. Hawaii recorded the largest quarter-over-quarter increase at 4.7%, followed by Rhode Island at 2.4%. Conversely, Puerto Rico declined 2.6% from the first quarter, while New Mexico fell 1.7%.

House price performance varied even more widely across the nation’s 100 largest metropolitan areas. Annual house price appreciation ranged from a decline of 3.7% to an increase of 7.7% in the second quarter of 2026.

Overall, 75 of the 100 metro areas posted year-over-year gains, while 22 recorded declines and three remained unchanged. Forty-nine metros matched or exceeded the national appreciation rate of 2.1%.

Elgin, Illinois, recorded the strongest annual appreciation among the 100 largest metros, with prices rising 7.7%. Allentown-Bethlehem-Easton, Pennsylvania–New Jersey, followed with a 7.0% increase.

Chicago, New York, Newark, and Greensboro rounded out the ten strongest annual performers. The rankings indicate continued strength in several Midwest and Northeast markets, where relatively limited housing supply may be helping support prices.

The weakest results were concentrated in portions of the West and Southwest. Everett, Washington, posted the largest annual decline at 3.7%, followed by San Antonio-New Braunfels, Texas, at 3.0%.

Bakersfield-Delano, California, declined 2.6%, while Seattle and San Francisco each fell approximately 2.4%. Tucson, Albuquerque, San Jose-Sunnyvale-Santa Clara, Washington, D.C.–Maryland, and Denver-Aurora-Centennial were also among the ten weakest-performing large metro areas.

Short-term changes sometimes diverged considerably from annual trends. Allentown posted a 4.3% quarterly increase, while Austin rose 3.7% from the first quarter despite a slight year-over-year decline.

By contrast, San Francisco posted a 9.1% quarter-over-quarter decline, the largest quarterly decline among the 100 metros, followed by Tucson at 5.3% and San Jose at 3.6%.

These large quarterly movements highlight the greater volatility in metro-level house price data. While year-over-year changes provide a better indication of underlying price trends, quarterly measures can help identify more recent shifts in local housing market conditions.

Note:

Unless otherwise noted, this blog post uses the quarterly purchase-only House Price Index (HPI), which measures the sales prices of homes that are bought and sold, rather than the broader all-transactions HPI. The purchase-only HPI provides a more precise view of current market conditions. Year-over-year change compares 2026 Q2 with 2025 Q2, while quarter-over-quarter change compares 2026 Q2 with 2026 Q1.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Second Quarter 2026 Multifamily Construction Data – Eye On Housing

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According to NAHB analysis of quarterly Census data, the count of multifamily, for-rent housing starts increased year-over-year during the second quarter of 2026. For the quarter, 117,000 multifamily residences started construction. Of this total, 109,000 were built-for-rent. This built-for-rent total was 5% higher than in the second quarter of 2025. Prior NAHB analysis suggests this expansion primarily occurred in smaller metro areas and lower density markets, given ongoing weakness in urban core areas.

The market share of rental units of multifamily construction starts was 93% for the second quarter. A historical low market share of 47% for built-for-rent multifamily construction was set during the third quarter of 2005, during the condo building boom. An average share of 80% was registered during the 1980-2002 period.

For the second quarter, there were 8,000 multifamily condo unit construction starts, up slightly from a year ago (7,000) given ongoing housing affordability challenges.

An elevated rental share of multifamily construction is holding typical apartment size below levels seen during the pre-Great Recession period. According to the second quarter 2026 data, the average square footage of multifamily construction starts increased slightly to 1,053 square feet. The median, or typical unit, increased to 1,008 square feet. These measures are consistent with the elevated share of multifamily built-for-rent construction.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Second Quarter Declines for Single-Family Built-to-Rent – Eye On Housing

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Single-family built-for-rent (SFBFR, or built-to-rent (BTR)) construction fell back in the second quarter of 2026, as a higher cost of financing, increased multifamily supply and policy concerns over Congressional legislation related to institutional capital froze parts of the development market. Fortunately, changes by the House of Representatives addressed a harmful Senate proposal. The housing legislation, as enacted into law, does not include a prohibition against institutional capital financing BTR housing. Stabilization for BTR housing should be reached in the coming months.

According to NAHB’s analysis of data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design, there were approximately 15,000 single-family built-for-rent (SFBFR) starts during the second quarter of 2026. This is down measurably from the second quarter of 2025 (18,000).

Over the last four quarters, 63,000 such homes began construction, which is a 16% decrease compared to the 75,000 estimated BTR starts for the prior four quarter period.

The BTR market is a source of inventory amid challenges regarding housing affordability and down payment requirements in the for-sale market, particularly during a period when a growing number of people want more space and a single-family structure. Single-family built-for-rent construction differs in structural characteristics compared to other newly-built single-family homes, particularly with respect to home size.

Given the relatively small size of this market segment, the quarter-to-quarter movements typically are not statistically significant. The current four-quarter moving average of market share (just under 7%) is nonetheless higher than the historical average of 2.7% (1992-2012).

Importantly, as measured for this analysis, the estimates noted above include only homes built and held by the builder for rental purposes. The estimates exclude homes that are sold to another party for rental purposes, which NAHB estimates may represent another three to five percent of single-family starts based on industry surveys.

The Census data note an elevated share of single-family homes built as condos (non-fee simple), with this share averaging about 3% over recent quarters. Some, but certainly not all, of these homes will be used for rental purposes. Additionally, it is theoretically possible that some single-family built-for-rent units are being counted in multifamily starts, as a form of “horizontal multifamily,” given that these units are often built on a single plat of land. However, spot checks by NAHB with permitting offices indicate no evidence of this data issue occurring.a

With the onset of the Great Recession and declines in the homeownership rate, the share of built-for-rent homes increased in the years after the recession. While the market share of SFBFR homes is small, it has clearly expanded. Given affordability challenges in the for-sale market, the SFBFR market will likely retain an elevated market share.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Multifamily Developer Confidence Weakens in Second Quarter – Eye On Housing

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Confidence in the market for new multifamily housing weakened year-over-year in the second quarter, according to the Multifamily Market Survey (MMS) by the National Association of Home Builders (NAHB). The MMS produces two separate indices. The Multifamily Production Index (MPI) had a reading of 43, down three points year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 74, down eight points year-over-year.

Multifamily developer sentiment is currently constrained by regulatory barriers and difficulty obtaining financing. The recently enacted 21st Century ROAD to Housing Act should provide some relief with respect to these challenges, but these policies will take time to implement. Meanwhile, rental housing demand is being supported by improving job growth during the second quarter of 2026. It is clear that supply-side headwinds continue to weigh on multifamily developer sentiment. In addition to relatively high interest rates and other financing issues, developers are finding it difficult to obtain approvals and utility connections in some parts of the country. High material prices and shortages of skilled labor also remain significant impediments

Multifamily Production Index (MPI)

The MMS asks multifamily developers to rate the current conditions as “good”, “fair”, or “poor” for multifamily starts in markets where they are active. The index and all its components are scaled so that a number above 50 indicates that more respondents report conditions as good rather than poor. 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 the built-for-sale (or condominium) market.

There were three components which experienced decreases year-over-year during the second quarter. The component measuring subsidized units fell seven points to 54, the component measuring mid/high-rise dropped four points to 32, and the component measuring garden/low-rise dipped two points to 48. Meanwhile, the component measuring built-for-sale units was the only one to increase year-over-year, up three points to 38.

Multifamily Occupancy Index (MOI)

The survey also asks multifamily property owners to rate the current conditions for occupancy of existing rental apartments in markets where they are active as “good”, “fair”, or “poor”.  Like the MPI, the MOI and all its components are scaled so that a number above 50 indicates more respondents report that occupancy is good than poor. The MOI is a weighted average of three built-for-rent market segments (garden/low-rise, mid/high-rise, and subsidized). 

Although all three components declined year-over-year, they all remained above the break-even point of 50 for the second quarter of 2026. The mid/high-rise component dropped 11 points to 62, the subsidized component decreased eight points to 82, and the garden/low-rise component fell seven points to 77.

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 is enough data to seasonally adjust the series, changes in the MMS indices should only be evaluated on a year-over-year basis.

Please visit NAHB’s MMS web page for the full report.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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