U.S. Multifamily Rents Edge Higher in Q3 2026 as Construction Slows

U.S. multifamily rents rose moderately in the third quarter as apartment construction continued to slow, signaling further progress toward balancing supply and demand after a prolonged development cycle, according to CBRE’s latest research.

Average monthly rent rose 1% year-over-year and 0.5% quarter-over-quarter to $2,268 in Q3 2026, supported by positive performance across the Midwest, Northeast and Pacific regions.

Net absorption, which measures the change in occupied units, totaled 8,747 units in Q3 2026, down from 42,166 units in Q2 2026. The national multifamily vacancy rate increased by 40 basis points from the second quarter to 4.7%, remaining below its long-term average of approximately 5.0%.

New supply growth continued to ease, with 85,300 units delivered in Q3 2026, an 11% decrease from a year earlier. Construction activity is expected to slow further in the coming quarters. The slowdown in new supply should help alleviate vacancy pressure in many markets as the development pipeline continues to contract.

Multifamily investment activity was boosted by the $69.6 billion AvalonBay-Equity Residential merger. Excluding that transaction, investment activity in Q3 2026 declined by 8.7% year-over-year as investors navigated elevated interest rates.

“Volatility and uncertainty continue to weigh on transaction activity, and the bid-ask gap remains a persistent challenge,” said Kelli Carhart, Head of Multifamily Capital Markets for CBRE. “However, market fundamentals are improving. With peak supply now behind us and rent growth poised to strengthen, the sector is positioned for a gradual recovery in transaction activity.”

Other Q3 2026 Multifamily Sector Highlights:

• The Midwest (2.3%), Northeast (2.2%) and Pacific (1.4%) regions led the U.S. in year-over-year rent growth.
• Forty markets tracked by CBRE recorded positive net absorption, down from 69 in Q2 2026. Dallas led with 3,000 units absorbed, followed by Los Angeles (2,800) and Orlando (2,700).
• Twenty-one markets had year-over-year rent declines in Q3 2026, down from 33 in Q2 2026.
• Vacancy rates increased quarter-over-quarter in 64 markets. By comparison, 68 markets recorded vacancy rate declines in Q2 2026.