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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 74 September 2025 J O U R N A L These local slowdowns suggest that developers are responding to worsening conditions by reducing plans for new projects—an early warning sign that the supply of new rental units could tighten over time. Looking ahead, the doubled tariffs on imported steel and aluminum announced in June could make this condition worse. Recent data from the NAHB found that in Q2, confidence in the market for new multifamily housing increased year- over-year in the second quarter. NAHB's Q2 Multifamily Production Index (MPI) had a reading of 46, up two points year-over-year, while the Multifamily Occupancy Index (MOI) had a reading of 82, up one point year-over-year. "Multifamily developer confidence and sentiment are showing slight signs of improvement when compared to this time last year," said Debra Guerrero, SVP of Strategic Partnerships and Govern- ment Affairs at The NRP Group in San Antonio and Chair of NAHB's Multifam- ily Council. "High interest rates, rising construction costs, limited land availabil- ity, and restrictive local regulations are still significant issues in certain parts of the country. But confidence in subsi- dized affordable housing has shown considerable improvement in this survey, due in part to optimism surrounding the expansion of federal affordable housing resources flowing from the recent con- gressional reconciliation bill." Tracking Trends by Unit Size While rent prices historically rise during the spring and summer months, this year's seasonal lift has been softer than usual. As of July, rents were up just 1.2% year-to-date, compared to 2.8% growth over the same period in 2024. Despite near-term affordability gains for renters, the sharp drop in multifamily completions and early signs of weaken- ing permitting activity may shift market dynamics later this year or in 2026. For the study, Realtor.com examined rental data as of July 2025 for studio, one-bedroom, or two-bedroom units. Rental units include apartments, as well as private rentals (condos, townhomes, single-family homes). WILL SHIFT IN RATES OPEN THE DOORS TO A BUYER'S MARKET? A ccording to the National Association of Realtors (NAR), pending home sales decreased by 0.4% in July 2025 from the prior month, yet rose 0.7% year-over-year. The report provides data on the level of home sales under contract. "Even with modest improvements in mortgage rates, housing affordabil- ity, and inventory, buyers still remain hesitant," said NAR Chief Economist Lawrence Yun. "Buying a home is often the most expensive purchase people will make in their lives. This means that going under contract is not a decision home buyers make quickly. Instead, people take their time to ensure the timing and home are right for them." Regionally, pending sales declined month-over-month in the Northeast and Midwest, while holding essentially flat in the South, and rising in the West. Year-over-year, sales decreased in the Northeast and West, but increased in the Midwest and South. "Pending home sales remained rather subdued in July, as the housing market continues to grind through summer," said Realtor.com Senior Econ- omist Jake Krimmel. "July pending sales, or contract signings, fell 0.4% since last month, while rising a modest 0.7% year-over-year. The slight bounce back in year-on-year sales represents some much-needed mean reversion after an extremely sluggish June, when pending sales dropped 2.8%. Regionally, the West led the way with a 3.7% increase month- over-month in contract signings, but a decline of 1.9% year-over-year. Contract signings fell month-over-month in the Midwest 4.0%, yet were up 1.3% year- over-year. In the Northeast U.S., there was a 0.6% decrease month-over-month in contract signings, and a 0.6% decrease year-over-year. The South reported just a 0.1% decrease month-over-month in pending home sales, yet a 1.8% increase year-over-year. "After being decidedly a seller's mar- ket for years, the housing market is shift- ing," noted Bright MLS Chief Economist