The September 2024 NMHC Quarterly Survey of Apartment Construction & Development Activity determined that the construction market is gradually improving, with a notable decline in reported delays, although most respondents still report delays as well as additional project requirements unrelated to actual construction.
Even with fewer delays, there has been a significant decline in the number of construction projects being undertaken. Data from the Census Bureau indicate a 37.1% decrease in multifamily starts (5+ units in structure) between Q2 2023 and Q2 2024. If construction doesn’t pick up, existing affordability challenges will simply worsen in the years to come, as the current number of completions is still not enough to address the crisis.
Respondents indicated that challenges persist due to economic uncertainty, although many responded with optimism about medium- to long-term conditions. Further, the Fed’s interest rate cut this month – along with expectations of future cuts – will hopefully stimulate investment in new construction.
Notably, the majority of respondents are still reporting construction delays (52%), although that share has fallen for five consecutive quarters from 90% in June 2023. The most frequently cited cause for delays in starts over the past three months was economic uncertainty, at 92% of respondents (up from 73% last quarter). Fifty-five percent of respondents this quarter reported additional project requirements unrelated to actual construction being imposed by their jurisdictions, down from 70% last quarter.
“The September findings make it clear that while we are witnessing slow 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 as well as high state and local taxes all continue to hamper badly needed building or even make projects infeasible. Going forward, lawmakers should implement housing solutions that will work, including removing barriers to building and incentivizing needed construction, and reject regulatory proposals that will increase housing costs.”
Construction Indicators 3Q 2024 (% of Respondents)
- 52% Experienced Construction Delays
- 86% Saw Deals Repriced
- 10% Reported Labor Less Available
- 28% reported Labor More Available
- 21% Experienced Materials Delays
About the Survey
The September 2024 Quarterly Survey of Construction & Development Activity (Construction Quarterly Survey for short) was conducted from September 3 – 17, 2024 and received 29 responses from leading multifamily construction and development firms.
View the full survey results here.
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 or email the Council.
