U.S. Multifamily Market Stabilizes as Apartment Demand Improves and New Construction Slows

The U.S. multifamily market stabilized in the first quarter of 2026, as apartment demand improved and new construction slowed, according to CBRE’s latest research.

Net absorption, which measures the change in the number of occupied units, totaled 78,100 units in Q1 2026, rebounding sharply from 1,500 units of negative net absorption in Q4 2025. As a result, the national multifamily vacancy rate declined by 20 basis points quarter-over quarter to 4.8%, below its long-term average of 5.0%.

New supply continued to moderate, with 58,100 units delivered in Q1 2026, down 30% year-over-year. Construction activity is expected to slow further in the coming quarters. Net absorption exceeded new construction completions for the first time since the second quarter of 2025.

Average monthly rent increased 0.2% year-over-year and 0.4% quarter-over-quarter to $2,217 in Q1 2026. National rent growth reversed its recent decelerating trend, supported by improving conditions in the Mountain, Pacific and Midwest regions.

Multifamily investment volume totaled $29.5 billion in Q1 2026, down 6% from a year earlier. Despite the decline, the multifamily sector represented the second-largest share of total commercial real estate investment volume at 25%.

“The first quarter marked a turning point for multifamily. Supply is declining sharply, absorption is rebounding and vacancy is moving in the right direction,” said Kelli Carhart, Head of Multifamily Capital Markets for CBRE. “As the construction pipeline continues to shrink, we expect further improvement in both occupancy and rents.”

Other Q1 2026 Multifamily Sector Highlights:

• The Midwest (2.2%), Northeast (1.6%) and Pacific (0.8%) regions led the country in year-over-year rent growth.
• Sixty-three of the markets tracked by CBRE recorded positive net absorption, up from 58 in Q4 2025, led by New York (5,600 units), (4,200) and Phoenix (3,200).
• Net absorption exceeded new supply in 45 markets, up significantly from three markets in Q4 2025.
• Vacancy rates declined in 40 markets quarter-over-quarter, compared with just two markets in Q4 2025.