Supply and Demand
San Antonio’s multifamily market advanced toward balance in Q3 as the supply pipeline continued to contract and new deliveries slowed markedly. Units under construction totaled 3,993, down 31.7% year-over-year (YOY) and more than 75% below the 2023 peak. Deliveries of 677 units marked the lowest quarterly total since at least 2021 and brought year-to-date (YTD) completions to 4,356 units, 26.2% below the same period of 2025. Three submarkets had no units under construction, limiting competitive supply in those areas.
Demand remained constructive. Net absorption totaled 1,497 units in Q3, roughly double the Q3 2025 total and 820 units above new deliveries, marking a second consecutive quarter in which absorption outpaced new supply. YTD absorption reached 5,029 units, 21.7% ahead of the prior-year pace and 673 units above YTD completions. Leasing was broad-based, with 11 of 13 submarkets recording positive YTD absorption, led by Far West San Antonio and Comal County, reflecting the depth of renter demand across the metro.
Stabilized vacancy ended the quarter at 13.9%, edging up 20 basis points (bps) quarter-over-quarter. The YOY increase, however, narrowed for a second consecutive quarter to 100 bps, the smallest since Q3 2024, indicating that leasing momentum increasingly offset recent additions to inventory. With construction activity well below peak levels and demand remaining firm, conditions appeared increasingly supportive of vacancy stabilization and eventual improvement.
Pricing
Rent performance showed clear improvement on a YOY basis. Effective rents averaged $1,148 per unit and $1.31 per square foot, with the YOY decline narrowing to 3.5%, the smallest since Q1 2025. The improvement was widespread, with the pace of YOY decline easing in 11 of 13 submarkets relative to the prior quarter, and North Central San Antonio posting positive YOY growth. Moderating supply and improving absorption supported a more stable pricing backdrop.
Investment Sales
Investment activity remained constructive through the first three quarters of 2026, with 29 transactions totaling 4,980 units recorded YTD, a 7.4% increase in transaction count from the same period of 2025. Improving leasing momentum, a contracting construction pipeline, and narrowing rent declines strengthened the underwriting case for multifamily assets, drawing investor interest despite a still-selective capital markets environment. Buyers increasingly targeted assets positioned to benefit from improving supply-demand fundamentals, supporting a favorable outlook for transaction activity in the coming quarters.
