Vacancy Falls Below 9% as Construction Pipeline Shrinks to Lowest Level Since 2013
New York, July 15, 2026 – Cushman & Wakefield today released its Q2 2026 U.S. Multifamily MarketBeat, showing the U.S. apartment market continued to strengthen during the second quarter as demand outpaced new supply over the past year for the first time since early 2022, vacancy fell below 9% for the first time since 2024 and construction activity continued to retreat.
Net absorption totaled 124,600 units during the second quarter, the fifth-highest quarterly total in nearly 25 years and an 8% increase from a year ago. National vacancy declined 35 basis points quarter-over-quarter to 8.9%, ending more than a year of relative stability. On a trailing four-quarter basis, approximately 362,000 units were absorbed compared with roughly 358,000 units delivered, marking the first time demand exceeded new supply since early 2022.
"The apartment market is no longer defined by new supply pressures," said Sam Tenenbaum, Head of Multifamily Insights at Cushman & Wakefield. "Construction is slowing, demand has remained remarkably resilient and vacancy is now moving lower. That's a meaningful shift from the conditions that shaped the market over the past several years and points to improving fundamentals as the pipeline continues to thin."
Construction Pipeline Continues to Contract
The supply pipeline continued to shrink during the second quarter as elevated financing costs, construction expenses and more selective capital constrained new development.
Only 88,000 units were delivered nationally during the quarter, down 27% year-over-year and more than 40% below the quarterly peak reached in mid-2024. Meanwhile, approximately 475,000 units remain under construction, representing just 3.5% of existing inventory, the lowest level since 2013.
With development starts remaining muted, deliveries are expected to continue declining through 2027, creating favorable conditions for occupancy gains as existing supply is absorbed.
Demand Remains Resilient
Demand accelerated sharply during the quarter despite moderating job growth and slower population gains. Year-to-date net absorption reached approximately 208,000 units, nearly matching the pace recorded during the first half of 2025, which ended the year with the third most demand since 2000.
Sun Belt markets continued to post some of the nation's strongest demand during the first half of the year, with Dallas/Fort Worth (18,600 units absorbed), Phoenix (17,000), Atlanta (13,300) and Austin (13,200) among the top performers. New York led the nation overall with approximately 19,500 units absorbed during the first six months of 2026.
Many of the markets that experienced the largest development booms over the past several years are also beginning to see the strongest recoveries. Of the 20 markets that expanded inventory the most since 2019, 18 recorded quarter-over-quarter vacancy declines during the second quarter, averaging declines nearly three times the U.S. average as new supply moderated and demand remained healthy.
Rent Growth Begins to Improve
National asking rents increased 1.5% year-over-year, accelerating from 1.1% in the first quarter and marking the first improvement in annual rent growth in approximately one year.
The Bay Area continues to lead the nation's rent recovery, with San Francisco posting 13.0% annual rent growth, followed by San Jose (7.0%), Norfolk (5.6%) and the East Bay (4.8%).
As the development pipeline continues to shrink and vacancy trends lower, rent growth is expected to strengthen further over the next 12 months.
You can access the full Q2 Report here.
