The National Multifamily Housing Council’s latest Quarterly Survey of Apartment Construction & Development Activity for the third quarter of 2026 underscores a difficult environment for new multifamily projects. Respondents cited a combination of rising construction costs, economic uncertainty and muted rent growth as key forces making development harder to underwrite. Even so, the survey also reveals that many builders and developers remain cautiously optimistic about how overall construction conditions could evolve over the next six to twelve months.
Survey responses indicate a clear moderation in new project starts. Twenty-nine percent of participants said their firms began fewer developments compared with three months earlier, an increase from 20% reporting fewer starts in June. At the same time, 24% of respondents reported starting more projects over the same period, highlighting a mixed but generally softer development pipeline.
Among firms that reported starting fewer projects, most pointed directly to feasibility and macroeconomic challenges. Sixty-five percent of this group attributed the slowdown either to economic uncertainty or to projects no longer penciling out financially. Within that same subset, 59% said that low rent growth was an important factor behind their decision to pull back on new starts, underscoring how revenue expectations are weighing on ground-up multifamily activity.
The survey also captures how respondents view the near-term trajectory for construction conditions and capital availability. Half of all participants, 50%, expect overall construction conditions to improve over the next six to twelve months, up from 46% with that view in June. While respondents anticipate that equity financing may retreat over the next three months, they generally believe that both debt and equity financing conditions will improve over the coming year.
Chris Bruen, NMHC’s senior director of research and chief economist, summarized the tension between current challenges and future expectations. He noted that low rent growth, rising interest rates and higher costs for labor and materials are all making multifamily deals more difficult to make financially viable. At the same time, Bruen pointed out that most survey respondents remain broadly optimistic about construction conditions over the next six to twelve months, and nearly one-quarter reported that they had actually started more projects compared with three months earlier. Together, these findings portray a multifamily construction market where current headwinds are significant, but sentiment has not turned uniformly negative.
