Results from the March 2025 NMHC Quarterly Survey of Apartment Construction & Development Activity indicate improving conditions for some areas of the multifamily construction market, although continued challenges and uncertainty remain in others.
Notably, the share of respondents reporting construction delays decreased from last quarter, continuing a downward trajectory. Economic uncertainty remains a primary concern for respondents but there is optimism about long-term, overall market conditions, with a majority expecting conditions to improve over the next 6-12 months. On the other hand, expectations for increased construction costs have risen sharply compared to previous quarters.
“The March findings make it clear that while we are witnessing some market improvements, rental housing providers continue to face real challenges when it comes to the construction of new communities,” said NMHC President Sharon Wilson Géno. “Economic uncertainty, high interest rates, rising insurance costs and increasing construction costs all continue to make the building of badly needed housing challenging or even impossible. In order to ensure we can build the housing America needs, policymakers should consider the impact any proposed policy changes could have on the housing market.”
Fifty-eight percent of respondents reported experiencing construction delays over the last three months, falling from 78% in December (52% in September and 70% in June). The most frequently cited causes for delays in starts over the past three months were economic uncertainty and economic feasibility, both at 68% of respondents (from 42% and 58%, respectively, in December).
A positive finding was that staffing shortages as a cited cause of delayed starts remained low (5% of respondents) for the sixth consecutive quarter, however the share attributing delays to materials sourcing and delivery rose to 15% from 0% in the previous three quarters.
Although the majority of respondents expressed the expectation that overall multifamily construction market conditions will remain the same (64% of respondents; down from 81% in December) in the short term, the share expecting conditions to decline over the next three months rose to 28% (from 8% last quarter).
Construction Indicators 1Q 2025 (% of Respondents)
- 58% Experienced Construction Delays
- 75% Saw Deals Repriced
- 16% Reported Labor Less Available
- 28% reported Labor More Available
- 26% Experienced Materials Delays
Based in Washington, D.C., the National Multifamily Housing Council (NMHC) is where rental housers and suppliers come together to help meet America’s housing needs by creating inclusive and resilient communities where people build their lives. We bring together the owners, managers, developers and suppliers who provide rental homes for 40 million Americans from every walk of life—including seniors, teachers, firefighters, healthcare workers, families with children and many others. NMHC provides a forum for leadership and advocacy that promotes thriving rental housing communities for all. For more information, contact NMHC at (202) 974-2300, email the Council, or visit NMHC's website at nmhc.org.
