Institutional investor growth is expected to climb in the Raleigh, North Carolina, multifamily market this year, with the promise of rising rental rates returning to the metro area.

This comes as the city’s apartment market finds stabler footing following several years of rapid growth, according to a Marcus & Millichap multifamily investment report.

“We’re seeing investor interest pick up again, especially in Class C and mid-tier assets located in submarkets with limited new supply and stable demand,” Ben Yelm, the firm’s managing director and market leader for the Carolinas, said in a statement.

Rent growth will remain subdued in 2026 but will grow, the report says. The effective rent across the city is expected to rise 0.7% to $1,490 per month.

Rents fell in 2025 due to a glut of supply, which led to landlords competing for tenants. Landlords resorted to abundant concessions because of high vacancy rates in a still-saturated Raleigh rental market last year.

This year, the metro multifamily vacancy rate is projected to fall to 5%, marking Raleigh’s third consecutive year of tightening conditions.

There isn’t much active multifamily construction in the pipeline. In fact, northwest Raleigh recorded no new completions for two years straight. Inventory growth is forecast to drop to 2.9%, according to the report.

Nationwide, the number of apartments underway at the start of this year was the lowest since the midpoint of 2015, when roughly 510,000 units were being built, the report says.

Since rents are expected to rise, Raleigh is seeing renewed interest in property sales.

“Some institutional investors are returning to Raleigh for the first time in several quarters, especially where pricing has corrected below peak levels,” Yelm said.

The report says the combination of Federal Reserve rate cuts, a broader lender pool and higher available leverage should lead to more multifamily deals in general in 2026.

The Raleigh-Durham area’s population increased by 10.4% since 2019 and will likely continue to grow, leading to increased occupancy and rent growth as the multifamily pipeline narrows.