NMHC Survey Highlights Challenging Environment for Apartment Development

The National Multifamily Housing Council (NMHC) said its Quarterly Survey of Apartment Construction & Development Activity for the third quarter of 2026 points to a challenging development environment characterized by increasing construction costs, economic uncertainty and low rent growth. However, even as fewer projects break ground, builders and developers remain optimistic in their 6-12-month outlook on overall construction conditions.

Twenty-nine percent of respondents reported starting fewer projects compared to three months ago, up from 20% in June, while 24% said their firm started more projects. Of those respondents reporting fewer projects started, 65% attributed this pullback to either economic uncertainty or projects not being financially feasible. Fifty-nine percent of this group said low rent growth contributed to them starting fewer projects.

However, 50% of respondents expect overall construction conditions to improve over the next 6-12 months, up from 46% in June. Aside from expecting equity financing to pull back in the next three months, respondents believe both debt and equity financing conditions will improve over the next year.

“Low rent growth combined with an uptick in interest rates and rising costs for labor and materials is making multifamily development more difficult to pencil,” said Chris Bruen, NMHC senior director of research and chief economist. “Yet, despite these challenges, survey respondents remain largely optimistic in their outlook about construction conditions over the next 6-12 months, and nearly a quarter reported actually starting more projects compared to three months ago.”