Apartment developers pulled back on new construction over the summer, and more of them are now watching labor costs climb faster than inflation, according to the National Multifamily Housing Council’s September 2026 Quarterly Survey of Apartment Construction & Development Activity, released Sept. 24.
Twenty-nine percent of the builders and developers surveyed said their firms were starting fewer multifamily projects than three months earlier. Twenty-four percent said they were starting more, and 41% reported no real change. NMHC conducted the survey from Sept. 1 to Sept. 18 and received 60 responses from what the trade group describes as leading multifamily construction and development firms.
The share reporting fewer starts has widened in each survey this year. It was 12% in the March round and 20% in June, according to NMHC’s published results for those quarters. Over the same stretch, the share reporting no change fell from 55% in June to 41%.
Delays are creeping back into the pipeline
The survey also recorded a rise in construction delays. Twelve percent of respondents said they were seeing more delays on projects already underway, up from 3% in June. An equal 12% reported fewer delays, down from 20% a quarter earlier, and 61% said delay levels were essentially unchanged.
One bright spot for developers: 37% said jurisdictions were imposing additional requirements on their projects, down sharply from 57% in the June survey. That is the survey’s proxy for regulatory friction at the local level, and it moved in developers’ favor even as the construction picture softened.
Labor costs turn, materials hold
The clearest change in this quarter’s results is on the labor line. Twenty-two percent of respondents said construction labor costs had risen faster than overall inflation over the prior three months β a share NMHC notes is more than double the 8% recorded in June. Nineteen percent said labor costs fell or rose more slowly than inflation, and 53% saw them as roughly unchanged relative to inflation.
Materials told a steadier story. Half of respondents said material costs tracked inflation, a third (33%) said they outran it, and 12% said they lagged it.
Expectations point the same direction. Over the next three months, 32% expect material costs to outpace inflation against 9% who expect them to lag; for labor the split is 20% to 13%. On a six-to-12-month horizon, the pessimism deepens on both: 38% expect materials to rise faster than inflation and 39% expect the same of labor, against 14% apiece expecting the opposite.
Pricing pressure is showing up in deal terms as well. NMHC’s summary indicators put the share of respondents who saw deals repriced at 51% for the third quarter, compared with 55% in June and 48% in March.
Gloomy near term, more confident year ahead
Asked about overall multifamily construction conditions over the next three months, 21% expect them to decline and just 7% expect improvement, with 68% expecting no change. The three-to-six-month window looks similar: 19% declining, 14% improving.
Push the horizon out to six to 12 months and the survey flips. Half of respondents (50%) expect conditions to improve β that is, to get easier to build β up from 46% in June, while 12% expect a decline, down from 14%. Thirty-one percent expect no change.
Financing expectations follow the same shape. A quarter of respondents (25%) expect equity to become less available over the next three months against only 5% who expect it to loosen. Over six to 12 months, 39% expect equity financing to become more available versus 16% who expect a decline. Debt looks friendlier in the near term β 16% expect more availability in the next three months against 9% expecting less β and better still further out, with 31% anticipating greater debt availability against 10% who expect the opposite.
That combination β a near-term freeze paired with a more confident year-ahead view β has been a recurring feature of NMHC’s surveys through 2026. Its separate quarterly survey of apartment market conditions in July found sales volume, debt and equity financing indexes all below the breakeven level of 50 even as rent growth and occupancy improved.
The starts data outside the survey has been choppy in the same direction. Dodge Construction Network reported that multifamily starts fell 13.5% month over month in August, though they remained up 3% year to date. And a shrinking pipeline has had one measurable upside for the sector: NAHB’s analysis of Census construction data found the average multifamily project took 18.9 months from permit to completion in 2025, down from 19.6 months a year earlier but still near decade highs, with skilled labor shortages a cited cause.
On our reading, the September survey is less a story about demand than about arithmetic: 29% of firms slowing their start pace while a growing minority watch wage costs outrun inflation is a pipeline problem that shows up in deliveries two and three years from now, not in this year’s rent numbers. The respondents’ own six-to-12-month optimism suggests they expect financing to be the variable that breaks first. NMHC publishes the full question-by-question results as a downloadable spreadsheet alongside the survey summary.
