Today’s edition sponsored by: JPI, Authentic, TeleCloud, The Kirkland Company and Northspyre.
Multifamily isn’t “Back” Yet, But it’s Trending That Way
I am well aware that some of you are tired of me talking about “green shoots” in the apartment market, particularly in higher-supplied markets. The cynic in you points out: “You (and others) have been saying this since December!” Others of you can’t get enough of it, eagerly consuming any sign of hope amidst 3+ years of flat-to-falling rents.
Well, whether you like it or not, I’m going to say it: There are more and more green shoots each month so far in 2026. It’s not a full-blown rebound. But the momentum is real, and it’s accelerating.
Some people refuse to acknowledge any positive momentum in the market until occupancy rates normalize and rents pop again. My response: Anyone can wait until it’s sunny to declare, “it’s daytime!” But it’s more useful to point out when the sun is starting to rise or set.
Enough with the preamble. Here are the latest signs of momentum – the green shoots – in the apartment market, with emphasis on the supply-drenched Sun Belt and Mountains markets working their way out of the biggest supply wave since the 1970s.
(Also: Check out the latest episodes of The Rent Roll podcast, offering an inside look at JPMorganChase’s $750 billion bet on housing, including multifamily with JPMC executives John Hofmann and Karen Purcell. Find us on YouTube, Spotify, Apple and Amazon.)
1) Data providers are reporting occupancy growth for the first time in 4 years
You can nitpick any one provider’s methodology, especially for occupancy, but when nearly all of them report the same core trend, that’s telling you something. Most of this traces to simple economics: New completions are thinning down, and now demand is outpacing supply again – allowing occupancy rates to move upward.
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CoStar reported the U.S. apartment sector’s first year-over-year vacancy improvement in 17 quarters, dating back to Q1 2022. CoStar’s Grant Montgomery said “the national supply-demand balance has become increasingly favorable over the past year.”
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RealPage data shows occupancy rates bottoming in December 2025, then rebounding 60 bps so far in 2026. RealPage’s Kim O’Brien wrote: “Helping occupancy and rent growth fundamentals, the U.S. absorbed more than 187,000 units in the April to June time frame, marking one of the strongest spring [and summer] leasing seasons in recent years.”
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Apartment List reported vacancy improvement in each of the past five months – snapping a long cold streak dating back to late 2021. In fact, prior to the upward trend starting in March 2026, vacancy rates nationally had improved in only one month since November 2021. Apartment List’s economists noted the supply/demand story is “finally changing, as we see multifamily occupancy also hitting an inflection point in tandem with rent growth.”
2) Rent momentum is shifting, and CoStar just upgraded its forecast
The Sun Belt momentum – plus continued strength in lower-supplied markets like the Bay Area and the Midwest and Northeast – has pushed up the rent trend nationally. All major data providers are showing improved momentum.
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CoStar recently raised its rent forecast for 2026, from +0.5% to +1.9%, noting the sector’s “significant progress made in the first half of the year in absorbing the excess inventory.”
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RealPage reported positive year-over-year effective rent growth in July 2026, the first time that’s occurred in 12 months.
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Yardi wrote that “rents continued to rebound in July,” and that July’s nominal month-over-month rent bump of $4 was “the largest July increase since 2015 outside the exceptional post-pandemic boom years.”
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RealPage also reported that while rent concessions remain elevated, concessions have eased (from 15-year highs) a bit in back-to-back months.
3) Austin leads the nation in rent momentum, and that’s saying something
Austin is the poster-child market for excess supply. Its apartment base expanded faster than any other major MSA this decade. Rents fell as a result. But demand stayed strong, and now supply is plunging, and fundamentals are starting to improve.
To be clear: Rents are still falling, and Austin is still very much a renter’s market right now. But the pace of cuts has cooled substantially.
Back in March, effective rents in Austin were down 7.5% year-over-year. In July, rent cuts had eased to 2.8%. Still, falling, yes, but look at the second derivative – the change in the change. It’s a 480 bps swing between March and July, the biggest swing among major U.S. markets over that time. And the 2.8% rent cut is Austin’s smallest in 38 months, according to RealPage data.
That is real momentum. Not a full-blown rebound yet. But real momentum.
4) Look who’s back on the rent growth leaderboard
Boise?! Wilmington?! Charleston?! Reno?! Four poster-child smaller markets for huge supply waves, especially the first three. Not long ago, rents were falling in all four. Fast forward to today, and all four cracked the Top 20 leaderboard with rent growth topping 3% (with Boise and Reno topping 6%).
West Palm Beach is close to joining them, with rents now up 2.4% year-over-year, a 41-month high.
Remember all those commentators saying the boom was over in cities like Boise when rents fell? But they missed the real story: Falling rents were never about weak demand, just high supply. Now supply is down, and demand still strong. So rents are up.
Smaller markets like these tend to be more volatile, and volatility swings both ways. And the latest upward swing may be a leading indicator for what happens in larger Sun Belt / Mountains markets as supply drops off.
5) Rent momentum is shifting in other key Sun Belt markets – and nationally, too
Beyond Austin and beyond high-flying secondary/tertiary markets, we’re seeing a similar pattern (albeit, to lesser degree) in other previously high-supplied markets.
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Denver, Tampa and Phoenix – which all ranked with Austin as the nation’s biggest rent-cutting markets earlier this year – have seen 220-280 bps upward swings in year-over-year effective rent change since March. Still negative, yes, but much less so than previously.
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Year-over-year rent change is nearing positive territory again in Fort Lauderdale (0.0%) and Jacksonville (-0.1%).
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Raleigh/Durham, Orlando, Dallas, Miami, San Antonio and Houston have all seen upward swings of 100+ bps, meaning the depth of rent cuts have moderated.
Momentum is real, but can it be sustained?
There’s no question that U.S. apartments are – so far – seeing upward momentum for the first time since early 2022. But can it be sustained? That’s a different question, and a fair topic for debate. There’s a case for both ways.
On the downside: We’ve got choppy job growth, challenges for young adults getting jobs (and more of them living with parents), re-accelerating inflation, plus very low consumer confidence.
On the upside: We’ve got significantly improved rent affordability (for Class A/B renters in particular), significantly reduced supply pressures, better-than-expected absorption, and a big discount to rent versus buy.
Bottom line: We don’t know what the future holds. But we do know supply – not demand – has been the biggest headwind for apartments these past four years. And supply is going down. So barring a material economic slowdown, there’s a case to be made that the apartment outlook looks bright.
Other Highlights
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Newmark released its latest “U.S. Multifamily Capital Markets Conditions & Trends” report, which you can find here. This is always a must-read IMHO. One notable finding: We’re on track for 2026 to be the second-biggest-year ever for apartment debt originations.
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In student housing, pre-leasing for the fall semester “continues to outperform historical norms,” RealPage reports.
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AvalonBay and Equity Residential have finalized their merger, and began operating under their new name, Vivmark Residential.
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GO Residential, a smaller apartment REIT trading on the Toronto Stock Exchange but operating apartments in the U.S., is acquiring H&R REIT’s multifamily assets, presumably including Dallas-based Lantower Residential.
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San Francisco’s apartment market remains red hot, as Apartment List writes.
— My Latest Posts on LinkedIn —
Here are some recent posts if you missed them:
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Is pet rent a “junk fee”? The city of Seattle says so, but that view will likely backfire on renters — and their pets.
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Hello, Vivmark Residential! AvalonBay and Equity Residential completed their merger and began trading under the Vivmark name on August 18.
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New construction rents remain down substantially in some markets, but reaching new highs in others.
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Here are the top 20 MSAs for apartment rent growth right now.
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While consumer inflation has re-heated since the Iran conflict started, apartment and SFR operators report the opposite for OpEx.
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Here’s a wild chart showing the rapid decline in renter mobility.
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Apartment rent growth is trending upward again, and may have bottomed over this past winter.
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Here’s the apartment absorption leaderboard for the first half of 2026.
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There’s more apartment distress making the news (and surely even more to come), but it’s still not nearly as systemic as many people might think.
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There’s a big plot twist in the AvalonBay-Equity Residential merger.
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Apartment affordability continues to improve as rent-to-income ratios decline to pre-pandemic levels.
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JBREC analysis of Census data shows strong renter household formation, aligning with RealPage and CoStar apartment absorption data.
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The Wall Street Journal dove deep into NYC’s rent stabilized apartment program, and found a “surprising portion” of units go to high-income renters.
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One popular but totally useless chart — housing to population ratio.
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The ROAD to Housing Act is official, but big questions continue to hang over the future of the SFR/BTR markets.
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We’re not becoming a “renter nation.” Instead, we’re becoming a “failure to launch” and “multigenerational household” nation.
— Now Spinning on The Rent Roll Podcast —
For 2025, The Rent Roll with Jay Parsons podcast ranked in Spotify’s top 2% of podcasts for minutes played and in the top 1% for most shared shows. Additionally, The Rent Roll continues to frequently rank on Apple’s charts for investing-themed podcasts, and was recently ranked as the third-best podcast in all commercial real estate (and #1 in housing) by the readers of CRE Daily!
Thank you to everyone who’s made The Rent Roll part of your weekly routine! New episodes are released every Thursday morning.
Find us on YouTube, Spotify, Apple and Amazon. Recent episodes:
Episode 98: Inside JPMorgan’s Big Bet on Rental Housing + Capital Markets Update with JPMorgan’s John Hofmann and Karen Purcell
Episode 97: Inside Pretium + 5 Takeaways from the SFR REITs’ Earnings Calls with Pretium’s Stephen Scherr
Episode 96: 5 Takeaways from Apartment REITs’ Earnings Calls with Camden’s Alex Jessett
Episode 95: Less Red Tape, More Supply with former U.S. FHA Commissioner Frank Cassidy
Episode 94: Renter Demographics Update with JBREC’s Chris Porter
Episode 93: Accidentally Institutional with 7 different mid-sized SFR/BTR operators
Episode 92: Mid-Year Multifamily Update with Greystar’s Quinn Eddins
Episode 91: When Will Rents Recover? “It Depends,” with Bridge’s Matt DeGraw
