Key Highlights:
- Multifamily fundamentals are beginning to rebalance, as new deliveries have peaked and declining construction activity allows demand to catch up with supply.
- Vacancy trends expected to moderate through 2026, with improving renter retention supported by high homeownership costs and demographic demand.
- Rent growth is stabilizing, with early signs of recovery emerging in supply-constrained markets, even as national averages remain relatively flat.
- Construction starts have fallen sharply (down ~30% YoY), setting up a meaningful decline in future supply and supporting improving fundamentals into 2026–2027.
- Market performance is diverging, with supply-constrained coastal and Midwest markets leading recovery while several Sunbelt metros continue to work through elevated inventory.
- Capital markets are improving, with lending conditions easing and transaction activity expected to increase as pricing expectations and underwriting stabilize.
- Investor demand remains highly selective, favoring well-located, newer assets and markets where supply pressures are easing.
