Balancing Act: The State of Multifamily Construction

It’s no secret that residential development is cyclical, and the multifamily sector is currently experiencing mixed conditions with steady supply coming online and lower starts.

“We’re at a point of vulnerability here, but it’s natural,” notes Omar Rihani, executive vice president and national residential sector leader at Project Management Advisors. “You can’t perfectly deliver supply to meet demand. It just takes too long to deliver housing. We’re entering the period where starts are way down and slowing, and the demand continues to outstrip the supply.”

Confidence in the market for new multifamily housing declined year over year in the first quarter of 2024, according to the National Association of Home Builders’ Multifamily Market Survey released in May. The Multifamily Production Index, which measures builder and developer sentiment about current production conditions in the apartment and condo market, had a reading of 47, down three points year over year. The index is scaled so that a number below 50 indicates that more respondents reported conditions are poor versus good.

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