Quarterly Apartment Supply Hits Four-Year Low

Q1 apartment deliveries hit a four-year low, signaling relief ahead for oversupplied markets.

Nina Dale
April 28, 2026

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Good morning. After a record-setting construction surge, apartment supply is finally easing. Q1 deliveries dropped to a four-year low, signaling a potential turning point for oversupplied markets.

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Market Snapshot

S&P 500

GSPC

7,173.91

Pct Chg:
+0.12%

FTSE NAREIT

FNER

825.94

Pct Chg:
-0.59%

10Y Treasury

TNX

4.334%

Pct Chg:
+0.024

SOFR

30-DAY AVERAGE

3.65%

Pct Chg:
-0.00

*Data as of 4/27/2026 market close.

Supply Reset

Quarterly Apartment Supply Hits Four-Year Low

Apartment construction is losing steam, with Q1 deliveries hitting their lowest level in four years.

Supply reset underway: Apartment construction is losing steam, with just 75,205 units delivered in Q1 2026, the lowest quarterly total since early 2022, according to RealPage. It marks only the second time in the past 12 quarters that completions fell below 100,000 units, a sharp contrast to the five straight quarters above that threshold during the recent building boom.

From peak to pullback: Deliveries peaked in Q3 2024 and have been declining ever since. The South, long the epicenter of new development, has seen the steepest drop, falling from more than 92,000 units at its peak to under 40,000 in Q1 2026, a 16-quarter low. The deceleration reflects a broader industry shift after years of aggressive construction.

Regional snapshot: The South still leads the nation with roughly 40,000 units delivered in Q1, more than double the West’s 17,700 units. Meanwhile, the Northeast (9,800) and Midwest (7,900) continue to play smaller roles in overall supply growth.

Sun Belt stays on top: Phoenix and Dallas once again topped the list for new deliveries, each exceeding 5,000 units during the quarter. These high-growth Sun Belt markets remain key pressure points as they work through elevated supply levels.

Not out of the woods yet: Slowing completions won’t bring instant relief. Roughly 612,000 units are still in lease-up—well above pre-pandemic norms—keeping pressure on rents. As Jay Parsons puts it, “As long as lease-ups remain elevated, don’t be surprised if rent growth stays muted,” with markets like Phoenix and Austin facing the most backlog.

➥ THE TAKEAWAY

Delayed relief: While the construction pipeline is clearly thinning, the sheer volume of units still in lease-up will keep pressure on rents in the near term. True pricing power likely won’t return until late 2026 or 2027, once the backlog is fully absorbed.

A MESSAGE FROM ARBOR REALTY TRUST

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✍️ Editor’s Picks

Audit guarantee: Authentic's Multifamily Audit pinpoints funnel leaks and comp gaps with a prioritized fix plan. Results guaranteed or your money back. Subscribers save 50%. (sponsored)
Leverage disconnect: Debt yields near 10.3% signal tighter underwriting, but persistent negative leverage means returns still depend on future NOI growth.
Recovery divide: Commercial property prices rose overall, but sharp office discounts and ongoing West Coast weakness highlight a fragmented and uneven recovery.
Up to 50% Reduction in Insurance Costs through Captives: Used by institutional owners & 90% of Fortune 500 companies, now available to $100MM to $3BN Portfolios through Real Property Captive. (sponsored)
Dividend reset: KKR Mortgage REIT cut its dividend and took a quarterly loss as it accelerates the cleanup of troubled office and life sciences loans while repositioning its portfolio.
Brokerage consolidation: Re/Max agreed to a roughly $550M sale to tech-driven Real Brokerage, as industry consolidation accelerates amid weak home sales.
Risk distribution: Higher CRE delinquencies at large banks are offset by lower exposure, keeping systemic risk contained while pressure shifts to regional lenders’ future lending behavior.

🏘️ MULTIFAMILY

Supertall push: Extell filed plans for a nearly 1,200-foot residential tower on the Upper West Side, potentially the neighborhood’s tallest, despite ongoing community opposition.
Manhattan momentum: Manhattan investment sales hit $3.7B in Q1, led by a 246% surge in multifamily deals as investor demand rebounds for prime assets.
Ownership concentration: Institutional investors own a small share of U.S. homes overall but dominate key Sunbelt markets, where their concentrated activity is reshaping supply and pricing dynamics.
Gentrification pressure: Massive mixed-use developments are reshaping Miami’s Little Haiti and Little River, raising displacement concerns even as developers pledge community benefits and affordability measures.

🏭 Industrial

AI infrastructure: Related and Blackstone secured $16B to build a massive Oracle data center campus in Michigan, underscoring surging AI-driven infrastructure demand.
Modular shift: Big Tech is rapidly adopting modular data center construction to accelerate delivery, despite rising design complexity and costs.
Industrial slowdown: Rising vacancy and falling rents continue to pressure the Inland Empire, though stronger leasing and a shrinking pipeline signal a potential rebound ahead.
Industrial acquisition: Bain Capital acquired a South Florida warehouse campus for $52M, expanding its footprint in a still-active industrial investment market.

🏬 RETAIL

Luxury retreat: Luxury retailers are pulling back to top-tier U.S. shopping corridors as weaker demand and a shrinking middle class reshape expansion strategies.
Retail lag: Brooklyn’s booming population and housing growth haven’t translated to retail, as leasing lags and neighborhood demand takes time to materialize.
Cap drift: Single-tenant retail sales are declining and cap rates are rising, but investor demand remains solid for essential, high-performing tenants.

🏢 OFFICE

Traffic climb: Office visits are rising in 2026, driven by return-to-office momentum, with West Coast markets leading the recovery gains.
Discounted deals: Los Angeles CRE activity highlights a steeply discounted Pasadena office sale alongside steady multifamily, retail and industrial transactions, signaling pricing resets but continued deal flow.
Deal honors: Major office leases, discounted acquisitions and HQ relocations—led by BXP’s 2100 M transaction—took top honors at D.C.’s CREBA Awards, highlighting standout deals shaping the region’s market.
Leasing milestone: SL Green’s 100 Park Ave. is now fully leased after a major long-term deal with Robinson+Cole, signaling continued demand for premium, amenity-rich office space in Midtown Manhattan.

🏨 HOSPITALITY

Refi refresh: Seattle’s Cedarbrook Lodge secured a $24M refinancing, replacing older debt as lenders continue backing well-amenitized boutique hospitality assets.
Hotel anchor: Virgin Hotels will open a 261-room property at Atlanta’s $5B Centennial Yards, anchoring a major mixed-use redevelopment as large-scale urban projects expand beyond gateway cities.
Sphere surge: Las Vegas’ $2.3B Sphere has defied early skepticism to become the world’s top-grossing venue, driven by immersive tech, high-demand residencies and expanding global ambitions.

📈 CHART OF THE DAY

Source: Ares

The current real estate recovery is still in its early innings—just five quarters in—compared to past cycles that typically ran 50–60 quarters from trough to peak.