Housing Supply Slowdown Gives Multifamily Market Room To Stabilize

The U.S. apartment market is poised to make strides toward recovery this year as leasing remains robust, the multifamily pipeline stays tight and homebuilders are slow to develop single-family housing stock, according to first-quarter industry data.

Renters are expected to absorb between 250,000 and 300,000 apartment units this year if demand remains stable, according to a Cushman & Wakefield report released this week.

While the first-quarter absorption total of 65,200 units was down from the same period in 2025, overall activity in the multifamily sector has stayed within historic norms. 

A 30% year-over-year drop in deliveries of new apartment units, with just over 380,000 units completed, helped create downward pressure on vacancy, according to Cushman & Wakefield. 

“The direction of the market is becoming clearer as the supply pipeline contracts. While conditions remain uneven, the balance between supply and demand is moving in a more favorable direction,” Sam Tenenbaum, Cushman head of multifamily insights, said in the report. 

Apartment vacancy across the country stood at 9.4% in Q1, practically unchanged from the previous quarter. Asking rents inched up nearly 1% year-over-year.

Concessions, while slowing, remain persistent, especially in the Sun Belt markets, according to GlobeSt. Some 41% of apartment properties across the U.S. offered concessions in the first quarter, up 10% from Q1 2025.

This recovery has begun amid economic headwinds, including weakening job growth and risk of rising inflation, which could still dampen industry fundamentals, according to an industry analysis by RealPage. 

However, a weak U.S. housing market is likely to buffer apartment demand in 2026 as high mortgage rates convince homeowners to stay put and home developers to put their pencils down, RBC said in a report this month.