Net absorption reaches strongest year-to-date level since 2021 as annual rent growth accelerates to 2.3%
New York– Cushman & Wakefield, a leading global commercial real estate services firm, announced today that its Q3 2026 U.S. Multifamily MarketBeat shows continued improvement in the national apartment market, with vacancy falling to its lowest level in three years as strong renter demand outpaces declining new supply.
National multifamily vacancy declined 30 basis points (bps) quarter-over-quarter to 8.6%, marking the third consecutive quarterly decline and bringing vacancy more than 90 bps below its Q4 2025 peak. The improvement comes as net absorption reached nearly 350,000 units through the first nine months of 2026, up 14% year-over-year and the strongest first-three-quarter total since 2021.
Meanwhile, new apartment deliveries declined 25% year-over-year to approximately 250,000 units, helping accelerate annual asking rent growth to 2.3%, its fastest pace since the first quarter of 2023.The multifamily market is benefiting from a meaningful shift in the balance between supply and demand," said Sam Tenenbaum, Senior Economist, Investor Insights at Cushman & Wakefield. "Apartment demand has remained resilient even as new construction has slowed considerably. We're now seeing that combination translate into lower vacancy and stronger rent growth across a growing number of markets."
Apartment Demand Reaches Multi-Year High
National net absorption increased 14% year-over-year through Q3, supported by continued household formation and an affordability gap between renting and homeownership.
Texas remained a major driver of demand, accounting for three of the nation's five leading markets by absorption. Dallas-Fort Worth led with more than 50,000 units absorbed year-to-date, followed by New York (37,000), Austin (34,000), Phoenix (31,000) and Houston (26,000).
On a percentage-of-inventory basis, Sarasota led the nation with absorption equivalent to 6.7% of its apartment inventory, followed by Savannah (5.3%) and Boise (5.1%). Charlotte (4.4%) and Denver (3.7%) also ranked among the strongest markets as newly delivered apartments continued to lease up.
Construction Pipeline Falls to Lowest Level Since 2015
New apartment supply continues to decline following several years of elevated construction. Approximately 250,000 units were delivered through Q3, down from 335,000 during the same period last year.
Fewer than 480,000 units remained under construction nationally at quarter-end, the lowest nominal level since 2015. The pipeline represented just 3.6% of existing apartment inventory, its lowest share since 2013 and less than half its recent peak.
The pullback has been widespread, with more than 70% of the 90 markets tracked by Cushman & Wakefield reporting smaller construction pipelines than a year ago. Markets that experienced particularly strong development during the previous cycle, including Sarasota, Savannah, Austin and Phoenix, recorded some of the largest declines."The construction slowdown is becoming an increasingly important part of the multifamily recovery," Tenenbaum said. "Many of the markets that absorbed substantial new supply over the past several years are now seeing their development pipelines contract. If demand remains near current levels, that should create additional room for occupancy and rents to improve as fewer new apartments enter the market."
Rent Growth Accelerates as Recovery Broadens
Average national asking rents increased 2.3% year-over-year to $1,950 per month in Q3, more than doubling the 1.1% annual growth rate recorded in the first quarter of 2026. While rent growth remains below its pre-pandemic average, the acceleration reflects improving occupancy and a more favorable supply-demand balance.
The West recorded one of the strongest turnarounds, with annual rent growth accelerating from 0.6% at the end of 2025 to 2.6% in Q3 2026, its fastest pace since late 2022.
The Bay Area has been a significant driver of that improvement. San Francisco led the nation with nearly 16% annual rent growth, followed by San Jose at 9.0% and the East Bay at 6.9%, supported in part by AI-related investment and employment growth.
The South also returned to positive rent growth, reaching 1.1% year-over-year in Q3 after turning positive during the second quarter. The Northeast continued to lead the nation's four major regions at 3.7%, followed by the Midwest at 3.0%.
Sunbelt Recovery Gains Momentum
Improvement has become increasingly evident across the South, where vacancy has declined 110 bps since peaking at the end of 2025. Regional vacancy stood at 10.5% in Q3, its lowest level since late 2023, with 31 of the region's 38 markets recording year-over-year declines.
The South has also experienced the sharpest construction pullback of any region. Its development pipeline now represents just 3.6% of existing inventory, down from 9.0% in early 2023 and the lowest share since 2012.
With higher financing costs continuing to weigh on new development, the Sunbelt’s pipeline is expected to remain subdued. Combined with improving absorption, this should support continued vacancy compression and a gradual recovery in rent growth across the region into 2027.
