Ask an industry analyst, and they may tell you prospects are brightening for the multifamily sector. Ask a developer, and they may have a more downbeat response.

That growing disconnect between sector outlook and developer sentiment was reflected in reports released this week by the National Association of Home Builders (NAHB) and Yardi Matrix.

The NAHB’s Multifamily Production Index posted a reading of 43 for the second quarter, down three points year over year. The MPI measures the sentiment of both builders and developers about current production conditions for apartments and condos on a scale of 0 to 100, with anything below 50 indicating majority-negative sentiment.

While the group’s Multifamily Occupancy Index, which measures the multifamily housing industry’s perception of occupancies in existing apartments, had a positive reading of 74 for the quarter, it was down eight points from the second quarter of 2025.

“Multifamily developer sentiment is currently constrained by regulatory barriers and difficulty obtaining financing,” said Kip Lewis, director of construction management at Ohio Capital Corporation for Housing.

Lewis, who serves as chairman of NAHB’s Multifamily Council, noted in an association press release that while the recently enacted 21st Century ROAD to Housing Act “should provide some help with respect to these challenges, but these policies will take time to implement.”

NAHB Chief Economist Robert Dietz tied the gloomy multifamily developer sentiment to headwinds on the supply side.

“In addition to relatively high interest rates and other financing issues, developers are finding it difficult to obtain approvals and utility connections in some parts of the country,” Dietz stated. “High material prices and shortages of skilled labor also remain significant impediments.”

Yardi Matrix, a subsidiary of property management technology firm Yardi Systems, flagged multifamily rent gains in July as “suggesting a market recovery may be underway.”

Advertised rents for multifamily properties rose $4 in July, which Yardi said is the biggest increase for the month of July since 2015 when excluding post-pandemic market distortions. It was the fifth straight month of rent increases, the company noted.

Though regional variations persist, the Yardi Matrix report cited encouraging trends in the Sun Belt and Mountain West markets, where rents have consistently decreased since 2024. Those markets “have recently posted rent increases, suggesting the worst of the supply-driven pricing pressure may be easing.”

“While it is too early to declare a turning point,” the report added, “the recent improvement offers hope that markets hit hardest by the [post-pandemic] development boom are beginning to recover.”