Apartment Vacancy Is Falling, But Stabilized Properties Aren’t Feeling the Relief

New apartment supply is soaking up demand and pulling national vacancy lower, but stabilized properties are still fighting for renters.

Nina Dale
August 13, 2026

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Apartment Vacancy Is Falling, But Stabilized Properties Aren’t Feeling the Relief

Good morning. The apartment market looks healthier on paper, but not every owner is feeling the improvement. Newly delivered units are driving absorption while vacancy at stabilized properties continues to climb.

CRE Trivia 🧠

Which massive Chicago wholesale complex did Joseph Kennedy buy from Marshall Field's estate in 1945 for $13 million?

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Market Snapshot

S&P 500

GSPC

7,748.50

Pct Chg:
+0.26%

FTSE NAREIT

FNER

851.63

Pct Chg:
+1.06%

10Y Treasury

TNX

4.688%

Pct Chg:
+0.004%

CME Term SOFR

1-Month

3.64%

Pct Chg:
-0.00

*Data as of 08/12/2026 market close.

Vacancy Disconnect

Apartment Vacancy Is Falling, But Stabilized Properties Aren’t Feeling the Relief

The U.S. apartment market’s headline vacancy rate is improving, but the gains are being driven largely by newly built properties rather than established communities.

By the numbers: According to CoStar, U.S. apartments absorbed 163,739 units in Q2, comfortably outpacing the 118,047 units delivered. That pushed overall vacancy down 26 bps QoQ and 14 bps annually to 8.15%. Yet stabilized vacancy—which excludes properties still in lease-up—rose 34 bps from a year ago.

New apartments are winning renters: Four- and five-star properties accounted for more than 111,000 units of Q2 absorption, or nearly 68% of the national total. Despite that demand, the segment still carried a hefty 10.2% vacancy rate, reflecting the large amount of recently delivered luxury inventory still being filled.

Luxury tells two stories: Overall vacancy for four- and five-star apartments dropped 138 bps YoY, while vacancy among stabilized properties increased 37 bps. That 175 bps divergence suggests new lease-ups are making the broader market look healthier even as established luxury communities face tougher competition.

Market-by-market: Fifteen of the 50 largest apartment markets saw overall vacancy decline while stabilized vacancy increased. Austin offered the starkest example: vacancy across four- and five-star properties fell 398 bps annually, but stabilized vacancy rose 34 bps. Cincinnati went the other direction, posting the largest overall vacancy increase among major markets—up 161 bps to 9%—followed by Cleveland at 121 bps.

The regional divide: The Northeast and Pacific remained the tightest regions, with average vacancy of 5.1% and 5.7%, respectively. The South stood at 10.8% and the Mountain region at 10.2%. More tellingly, stabilized vacancy increased year over year in every major U.S. region, even where overall vacancy improved.

➥ THE TAKEAWAY

Don’t let the headline rate fool you: Apartment demand is healthy enough to absorb the latest wave of construction, but much of that demand is flowing toward shiny new inventory. For owners of stabilized properties, falling national vacancy doesn’t necessarily mean easier leasing—or stronger pricing power—just yet.

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Community fund: Meta launched a $1B fund to support communities hosting its AI infrastructure as opposition to new data centers grows nationwide and public concerns intensify.
AI capital: Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR joined Nvidia to deploy at least $500B in capital for AI infrastructure projects as demand for computing power accelerates.
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🏘️ MULTIFAMILY

Supply reset: Yardi Matrix expects multifamily completions to bottom near 444,000 units in 2027 before gradually recovering as affordable housing takes a larger share of new supply.
H&R breakup: GO Residential and partners agreed to acquire H&R REIT assets in a $4.8B deal, expanding GO’s portfolio fourfold while Blackstone takes Canadian industrial properties.
Affordability gap: Housing affordability is improving as mortgage rates ease, but typical households still need $22,197 more in annual income to afford a median-priced home.

🏭 Industrial

Warehouse scrutiny: A $100M cleanup after a Lineage warehouse fire is prompting Los Angeles to reconsider large industrial facilities near residential areas.
Data pivot: BREIT exited self-storage with an $852M sale while investing $3.3B in QTS data centers, lifting the sector to 27% of its portfolio as its strategy shifts toward AI infrastructure.
Industrial footing: Industrial fundamentals are stabilizing as slowing development holds vacancy at 7.8%, despite trade uncertainty, rising costs and muted rent growth.
Matador lease: TensorWave signed a 15-year lease at Fermi’s Texas data center campus, generating more than $6.5B in projected revenue and boosting Fermi’s stock 21%.

🏬 RETAIL

Leasing momentum: Simon Property Group raised its 2026 outlook as strong leasing, rising tenant sales and a $4B-plus development pipeline fuel continued growth across its retail portfolio.
Human insight: Retailers are using AI to sharpen site selection while relying on human insight to assess customer behavior, brand fit and the real-world experience that data alone cannot capture.
Consumer resilience: Consumer spending growth eased in July, but healthy household savings, improving labor conditions, and stronger spending on experiences continue to support overall demand.
Tampa momentum: Tampa’s retail investment volume reached $1.6 billion over the past year, up 15% year over year as smaller and single-tenant deals drive activity above pre-pandemic levels.

🏢 OFFICE

CMBS surge: U.S. CMBS issuance reached $76.2B through July, led by office deals, while data centers emerged as a distinct SASB category and multifamily showed the thinnest underwriting cushion.
Boston fallout: A Deutsche Finance fund plans to file for insolvency after its vacant Boston life sciences property failed to sell or refinance, potentially wiping out the fund’s entire investment.
Office mandate: TikTok is moving to a five-day office requirement as part of a broader restructuring, adding to the growing push among major tech companies for more in-person work.

🏨 HOSPITALITY

Oceanfront redevelopment: El-Ad National Properties paid $60M for Fort Lauderdale’s Sea Club Resort, with the 1.2-acre oceanfront site likely headed for redevelopment into a 541-unit project.
Japanese expansion: APA Group acquired the 105-room Kimpton La Peer West Hollywood for $63M as the Japanese hotel operator targets 10,000 U.S. rooms by 2030.
Steady outlook: U.S. hotels are heading toward a stable 2027 with low, slow growth as limited supply, steady travel demand and stronger leisure-driven transient business support the market.

📈 CHART OF THE DAY

Source: Colliers

State economic performance is reshaping CRE investment, with high-growth markets like North Carolina and Texas attracting capital while affordability, trade exposure and structural weaknesses increasingly separate winners from laggards.

The Merchandise Mart. At 4.2M SF it was then the world's largest building; the Kennedy family sold it to Vornado in 1998 for approximately $625M.