Multifamily Net Absorption Hits 25-Year High as Rents Fall

Demand Surges Amid Softening Rents

Bisnow reports that the US multifamily sector posted its fifth-highest quarterly net absorption in nearly 25 years, per Cushman & Wakefield’s Q2 2026 report, even as asking rents continued to edge downward. Nationwide, 124,600 units were absorbed in the second quarter, an 8% gain from a year prior. Meanwhile, vacancy fell below 9%—the first sub-9% result since 2024—with the rate at 8.9%, compressing by 35 basis points from Q1. This momentum stands out given that broad economic drivers like slower job creation, tepid immigration, and modest population growth had cast doubt on near-term apartment demand.

The resilience of rental household formation has confounded those macro headwinds, as noted by Cushman & Wakefield, with demand outpacing new deliveries for the first time in over two years. Net absorption for the trailing 12 months hit 362,000 units, besting 358,000 new deliveries—a reversal from recent oversupply trends.

The Details

Median asking rents across the 50 largest US metros finished Q2 at about $1,700, according to Realtor.com. That figure represents a 1.5% annual decline and roughly 4% drop from summer 2022 highs. Despite the decline, rents remain about 16% above pre-pandemic benchmarks.

Studios faced the greatest pricing pressure, with rents falling 2.2% year over year. Regionally, the Sun Belt continues to lead the market. Dallas-Fort Worth led all metros with 18,600 units absorbed. Phoenix, Atlanta, and Austin followed with strong absorption totals.

However, construction pipelines continue to diverge sharply across markets. New York City permitted only 1.6 new units per 1,000 residents during 2025. Boston permitted just 1.1 units per 1,000 residents. Both metros recorded their lowest permitting rates since 2019.

Sun Belt Absorption Leads as New York, Boston Permitting Lags

Sun Belt metros again topped national absorption rankings, reflecting continued migration and job growth across those regions. Dallas-Fort Worth absorbed 18,600 units during H1 2026, delivering a standout performance. Phoenix, Atlanta, and Austin also posted gains exceeding 10,000 units.

Meanwhile, large coastal markets continue cooling considerably on the supply side. Cushman & Wakefield and Realtor.com show permitting in New York City and Boston near pre-pandemic lows. These trends suggest future supply will tighten as existing development pipelines taper.

This divergence highlights the broader split across the national multifamily market. Sun Belt markets remain expansionary, while gateway cities move toward increasingly constrained development pipelines.

Why It Matters

For multifamily investors, the latest data signals both near-term challenges and longer-term opportunities. Net absorption exceeding deliveries should help stabilize fundamentals in markets that recently received significant new inventory.

Stronger absorption should support occupancy rates and limit further rent corrections. Cushman & Wakefield notes that renter demand has far exceeded expectations based on modest job and population growth. That strength reflects continued household formation and a structural preference for renting.

Realtor.com reports a 1.5% annual decline in national median asking rents. Meanwhile, vacancy remains below 9%, contrasting sharply with earlier forecasts for prolonged rent declines and elevated vacancies.

However, studio rents remain soft, while permitting continues to moderate. These trends show developers have become less bullish about near-term expansion.

That shift carries strategic implications for investors holding or acquiring assets in supply-constrained urban markets. Meanwhile, resilient Sun Belt markets will likely continue attracting capital.

Investors in gateway and coastal cities should closely monitor limited new supply. Tighter pipelines could eventually support stronger rent growth if demand remains healthy. Meanwhile, improving office fundamentals across major US markets could support urban housing demand as workers return and leasing strengthens.

What’s Next

Looking ahead, multifamily permitting remains near decade lows in New York and Boston. That slowdown could create a supply crunch by late 2026 or during 2027.

As pipelines thin across major urban centers, stronger job or population growth could renew upward pressure on rents. Trailing 12-month net absorption has already surpassed new deliveries for the first time since 2022.

The market could finally shift from oversupply toward more balanced fundamentals. However, that transition depends partly on macroeconomic conditions remaining manageable.

Operators and investors should continue monitoring permitting trends and Sun Belt migration patterns. Both indicators could provide important early signals about future multifamily performance.