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Confidence in the national market for new multifamily housing declined year-over-year in the first quarter of 2024, according to results from the latest quarterly survey of multifamily developers released last week by the National Association of Home Builders.

The survey, called the Multifamily Production Index was down three points on a 100-point scale, to 47. The survey measures builder and developer sentiment about current production conditions in the apartment and condominium markets across four main property types: garden/low-rise rentals, mid/high-rise rentals, subsidized rentals and condominiums.

A reading below 50 shows that more respondents report conditions are poor than report conditions are good.

In each of the property types measured in the survey, all four posted year-over-year declines: the component measuring garden/low-rise declined two points to 55, the component measuring mid/high-rise units fell five points to 36, the component measuring subsidized units dipped one point to 50 and the component measuring built-for-sale units posted a three-point decline to 39.

“Multifamily developers are concerned about higher interest rates for construction and development loans and tighter lending conditions that are taking place in the market right now,” Tom Tomaszewski, president of The Annex Group and chairman of NAHB’s Multifamily Council, said in a statement. “There are also many areas across the country where developers are having a difficult time getting their projects approved.”

At the same time, the NAHB also said its survey of rental occupancy in garden/low-rise, mid/high-rise and subsidized apartments ticked up one point, to 83 on a similar 100-point scale.

“Owners of existing apartments continue to report strong occupancy, but this has the potential to soften when more of the 900,000-plus apartments currently under construction come on line,” NAHB Chief Economist Robert Dietz said in a statement. “NAHB is currently projecting that multifamily starts will fall 28% this year as developer activity slows.”