Construction Delays and Economic Uncertainty Continue to Challenge Housing Providers
The June 2024 edition of the NMHC Quarterly Survey of Apartment Construction & Development Activity found that 70% of respondents reported experiencing construction delays over the last three months. This marks the fourth consecutive quarter of decline in reported delays (down from 81% in March, 84% in December and 88% in September). Although this may suggest an improving environment, construction delays are still highly expected.
Seventy-seven percent of those experiencing delays reported delays in permitting, slightly lower than in March (79%) and December (84%). Reported delays in starts fell for the second consecutive quarter to 84% of respondents, from 87% in March and 92% in December.
The share of respondents who reported deals being repriced up rose to 20% (from 13% in March and 23% in December). While the share of respondents who saw deals repriced down held roughly constant (50% from 52% in March), the share who saw no repricing of deals fell from 27% in March to 18% this quarter.
Over the next 3 months, respondents expressed confidence that overall multifamily construction market conditions will remain the same (80% of respondents), with 14% of respondents expecting conditions will decline and 5% expecting they will improve. However, a higher share of respondents expressed an expectation that overall conditions will improve in the medium and long term—28% of respondents said they expect overall multifamily construction conditions will improve 3-6 months from now and most respondents (72%) said they expect conditions will improve over the next 6-12 months.
“Today’s Survey makes it clear that rental housing providers continue to face real challenges when it comes to the construction of new communities,” said NMHC President Sharon Wilson Géno. “Construction costs remain high while housing providers continue to deal with economic uncertainty, high interest rates, rising insurance costs as well as high state and local taxes. However, there does look to be more confidence that over the medium and longer terms overall markets conditions will improve.”
Construction Indicators 2Q 2024 (% of Respondents)
- 70% Experienced Construction Delays
- 70% Saw Deals Repriced
- 7% Reported Labor Less Available
- 36% Reported Labor More Available
- 50% Experienced Materials Delays
This quarter, NMHC revised the survey, including the addition of new questions and the removal of some previous ones, to better capture current trends and the most relevant indicators in the multifamily construction market. Historical data from 2022 and 2023 surveys for all questions, as well as from this year’s first quarter, are also available in a downloadable spreadsheet.
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, e-mail the Council at info@nmhc.org.