Residential Building Contractors NAICS 2361

Feb 17, 2026 - Multifamily Developer Confidence Drops

• Multifamily developer confidence declined in the fourth quarter of 2025, according to the National Association of Home Builders’ (NAHB) latest Multifamily Market Survey. The Multifamily Production Index (MPI) fell three points in Q4 2025 to 45 compared to the fourth quarter of 2024. The Multifamily Occupancy Index (MOI) decreased by seven points to 74 over the same period. An MPI or MOI reading of 50 or more indicates that multifamily production or occupancy, respectively, is growing. Multifamily developers’ headwinds include elevated construction costs and local regulatory difficulties. While interest rates have eased somewhat, they need to fall further to stimulate stronger multifamily construction activity. One bright spot in the MPI was garden/low-rise apartments, which, with a Q4 2025 reading of 54, was the only component of the MPI to see an increase in developer confidence. The 2025 gains for garden and low-rise apartments are expected to continue in 2026.
• Home builders facing the largest glut of unsold homes since 2010 are pitching new policy ideas to the White House to clear excess inventory, according to The Wall Street Journal. Builders' policy ideas include streamlined federal permitting, zoning incentives, expanded FHA access, and a federally backed rent-to-own program to help buyers who cannot afford today’s prices and interest rates. The proposals reflect mounting pressure as high costs, limited affordability, and new restrictions on private investors leave builders with too much inventory and fewer buyers. The industry is also trying to align with Trump administration officials who have criticized both builders and Wall Street landlords. While rent-to-own could help move excess supply, questions remain about enforcement, consumer protections, and whether builders could quickly ramp up construction afterward.

• Home remodeling spending growth is expected to moderate in 2026, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner spending on improvements and repairs is expected to increase 2.9% to $527 billion in the first quarter of 2026, compared to Q1 2025. In the second quarter of 2026, remodeling spending will trend downward to $518 billion but still be up 2.1% from Q2 2025. Spending will then moderate further to $517 billion in Q3 2026, up 2% from Q3 2025. In the fourth quarter of 2026, year-over-year spending is forecast to rise 1.6% to $522 billion. While solid remodeling permitting activity and gradually improving single-family home sales will support remodeling activity, potential headwinds include continued weakness of housing starts and elevated interest rates.
• The most daunting challenge faced by US home builders in 2025 was high interest rates, according to the most recent NAHB/Wells Fargo Housing Market Index survey. About 84% of builders surveyed said high interest rates were a significant problem in 2025, and 65% expect it to remain so in 2026. The second most cited problem in 2025, at 81% of builders, was buyers expecting prices or interest rates to fall if they wait to purchase, and 74% expect the issue to persist in 2026. Other top headwinds builders faced in 2025 include buyer concerns about the employment/economic situation (65% of builders), the cost and availability of developed lots (63%), negative media reports making buyers cautious (62%), and the cost and availability of labor (61%).