Multifamily Market Update: Record Absorption, Tightening Supply, and What It Means for You

Multifamily Demand Surges: Why You Should Pay Attention

If you’ve been watching the apartment market, you’ve likely noticed something dramatic: multifamily demand is roaring back. In Q2, net absorption – the change in occupied units – surged to 188,200 units, the highest second-quarter total on record, according to CBRE.

For you, this matters because the market has shifted. Vacancy rates are falling, supply is tightening, and both investors and renters are facing stronger competition.

What This Means for You as an Investor

For five straight quarters, leasing demand has outpaced new construction. The national vacancy rate dropped 70 basis points to 4.1%, well below the long-term average of 5%.

• If you own apartments: you’re likely seeing stronger occupancy and improved rent growth.

• If you’re evaluating deals: you’ll face more competition from other investors, but also more stable fundamentals.

• If you’re holding cash: this could be your window to enter while absorption remains strong.

• CBRE’s head of multifamily capital markets, Kelli Carhart, explains: “Demand is outpacing supply, and we see momentum carrying into 2026.”

  
  

Tightening Supply Creates Opportunity

Developers brought a record 450,000 new units online in 2024, but that pipeline has cooled dramatically. Only 83,000 units were delivered in Q2, and CBRE expects even fewer completions ahead.

For you, the investor, this means supply isn’t catching up — and that usually drives rents higher. In fact, average asking rent rose 1.2% year-over-year to $2,228, the first meaningful rent increase in two years. With inventory growth slowing, CBRE forecasts stronger rent acceleration through 2026.

Capital Flows Into Multifamily

The investment market reflects this momentum. Transaction volume rose 7.1% year-over-year to $32.9 billion, making multifamily the largest commercial real estate investment segment at 34% of the market.

If you’re deciding where to place capital, this signals confidence. Capital is flowing into multifamily, positioning it as a top sector for both institutional and private investors.

Regional Performance: Where You See the Biggest Gains

• Midwest rents rose the fastest at 3.7% year-over-year.

• Northeast rents grew 3.1%.

• Pacific rents edged up 1%.

• All 69 markets tracked by CBRE posted positive absorption. Leaders included:

  • New York (19,300 units)

  • Chicago (9,300 units)

  • Dallas (8,700 units)

• Net absorption exceeded new supply in 68 out of 69 markets, while vacancy rates fell in 68 markets.

Where you invest geographically could play a big role in capturing upside.

The Bottom Line for You

The U.S. multifamily market is entering one of the tightest, strongest cycles in over a decade. With demand outpacing supply, rents climbing, and capital flooding back into the sector, this is a critical moment for you to reassess your position.

• As an investor: expect stronger cash flow and appreciation potential.

• As a renter: prepare for higher competition and steady rent growth.

• As a business owner or professional: this shift signals where wealth and opportunity are concentrating.

  
  

With CBRE forecasting continued strength through 2026, the question is: how will you position yourself to benefit from one of the most resilient sectors in commercial real estate?