Site Prep Contractors NAICS 238910

Aug 9, 2025 - Multifamily Developer Confidence Improves

• Multifamily developer confidence rose in the second quarter of 2025, according to the National Association of Home Builders’ (NAHB) latest Multifamily Market Survey. The Multifamily Production Index (MPI) increased two points in Q2 2025 to 46 compared to the second quarter of 2024. The Multifamily Occupancy Index (MOI) rose by one point to 82 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 a tight lending environment, higher borrowing costs, and regulatory difficulties. As multifamily projects currently under construction come online, the NAHB projects a modest gain in multifamily starts in 2025 compared to 2024, but starts will remain well below levels seen in 2023.
• The total value of construction put in place declined by 0.4% in June 2025 compared to May, according to the US Census Bureau. Residential construction spending fell 0.7% in June, but spending on nonresidential building projects was mixed. Growth was led by a 1.1% uptick in lodging spending, followed by educational (up 0.2%), and amusement and recreation (+0.2%). However, several segments in the nonresidential building construction subsector saw spending fall in June, including office (down 1.2%), commercial (-0.7%), manufacturing (-0.5%), and healthcare (-0.2%). Associated Builders and Contractors (ABC) Chief Economist Anirban Basu said, “Nonresidential construction spending declined in June and has now contracted in 6 of the past 7 months.” He went on to say, “While ABC members remain optimistic about the second half of the year, according to ABC’s Construction Confidence Index, recent data pertaining to both the construction industry and the broader economy suggest weakness could persist in the months to come.”

• Demand for building design services dropped in June from the prior month, as architectural billings remain soft, according to a July report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) fell to 46.8 in June from May’s reading of 47.2. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries rose to 53.6 in June compared to 51.4 in May, and the index for the value of new design contracts increased from 45.9 to 46.0. The AIA’s Chief Economist, Kermit Baker said, “Business conditions were soft nationwide in June, with a slight billing increase in the South for the first time since October. Other regions saw declining billings, though at a slower pace. While all specializations experienced softer billings, the decline slowed for commercial/industrial and institutional firms. Multifamily firms faced the weakest conditions, with further declines.”
• According to data from the US Census Bureau and the National Association of Realtors, the US median price for an existing home was higher than the median price for a new home in the second quarter of 2025. In Q2 2025, the median price for a new home was $410,800, or $18,600 less than the median price for an existing home ($429,400). Buyers typically pay a premium to purchase a new home. Between 2010 and 2019, new homes were, on average, $66,000 more expensive than existing homes. However, the price gap has been narrowing over the past five years, with average new home prices dropping to $24,800 above the average existing home price. Homeowners with low interest rates have been reluctant to sell, pinching inventories. Meanwhile, builders have focused on affordability by building on smaller lots, reducing home sizes, and offering incentives.