The nation’s apartment developers and builders are seeing calm seas ahead, even considering recent economic headwinds, according to results from a second-quarter survey from the National Multifamily Housing Council (NMHC).

About 77% of survey respondents expect the overall multifamily construction market to remain unchanged during the next three months, while 13% expect conditions to deteriorate and 10% expect conditions to improve.

The survey also found that 55% of respondents say project starts are relatively unchanged compared to three months ago, while 22% say they are starting more projects. Only 20% say they are starting fewer projects.

Nearly half of builders and developers expect the next six to 12 months to be even better. About 46% of respondents said conditions should improve as the year progresses, while 35% said they expect the market to stay steady. Only 14% of respondents expect conditions to decline. 

Delays do not appear to be a major problem this year, with 63% of respondents saying construction delays are unchanged in the past three months. Another 20% are experiencing fewer construction slowdowns.

Even with builders and developers remaining positive, they are facing a variety of concerns. Those who said they were starting fewer projects often picked multiple reasons for the decision, including 67% saying the projects were not economically feasible at this time, 50% citing economic uncertainty, 42% singling out low rent growth and 25% pointing to the availability and/or cost of construction financing.

When looking at conditions over the next six to 12 months, 44% of respondents expected construction costs to remain the same or to keep pace with inflation, 36% expected costs to rise faster than inflation and 15% expected costs to increase at a rate slower than inflation.

“Inflation has picked up notably over the past few months,” noted Chris Bruen, NMHC chief economist and senior director of research, in a press release. “Consumer prices rose by an annualized rate of 8.2% between February and May, according to the consumer price index, and respondents to this month’s construction survey expect this to translate to higher construction costs over the coming year.”

The Southeast region, which includes the Carolinas, Georgia and Florida, was cited by 75% of respondents as recording fewer project starts in the second quarter. Texas was second, with 50% of respondents noting a slowdown. It was followed by the Rockies region, which includes Denver, with 42% of respondents experiencing fewer starts.

On the negative side, 57% of developers and builders say jurisdictions where they operate are imposing additional project requirements unrelated to actual project construction. When it comes to repricing projects that have been on hold during the past three to six months, 38% of respondents say they have lowered prices, 35% say they have left prices unchanged and 17% say they have increased prices.