- Apartments.com’s upgraded forecast sees national multifamily vacancy near 7.9% through 2026, falling to 7.5% by the end of 2027 as the market absorbs units added over the past two years.
- Annual rent growth is now projected at 1.4% through the fourth quarter, up 50 basis points from the prior year-end forecast, and the Q4 2027 projection rose from 1.9% to 2.6%.
- CoStar’s Grant Montgomery called the risks balanced, warning that weak hiring turning into job losses or persistent inflation could slow household formation and trim apartment demand.
Apartments.com raised its multifamily forecast, saying renter demand has outrun a shrinking pipeline of new deliveries.
Annual rent growth should reach 1.4% by the fourth quarter, up 50 basis points from the prior projection, and the Q4 2027 estimate rose to 2.6% from 1.9%.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
The Vacancy Path
Vacancy is forecast at about 7.9% for the rest of 2026, then 7.5% at the end of 2027. Stabilized vacancy should stay flat until early 2027 and then start to decline.
What Changed
CoStar’s Grant Montgomery, who directs multifamily analytics nationally, said the market worked through the excess inventory from 2024 and 2025 faster than expected. Demand beat forecasts while new deliveries kept falling.
Zoom Out
The upgrade fits what we saw in the Q3 data. Our brief on Q3 RentPulse showed national vacancy at 7.8%, the lowest since late 2023, even as concessions rose to 4.2% and Austin’s 9.9% concession rate ranked among the highest in the country.
Risks Look Balanced
Montgomery said demand has held up despite slower hiring, though a lot rides on the job market. A turn from soft hiring to layoffs could stall household formation.
Persistent inflation is the other risk. It could push renters toward cheaper units, keep roommates together or delay new households.
Why It Matters
Forecasts differ by data set. Apartment List data in our brief on rent growth turning positive put the median U.S. rent at $1,384 in October, up just 0.1% from a year earlier, the first annual gain since mid-2023.
Together, they suggest rents are turning, with the pace still modest.
What’s Next
The labor market is the swing factor. Watch hiring data for signs that household formation is slowing.
