Multifamily Outlook 2026 (Baird)

Summary

• Construction starts are down 74% from 2021 peaks, creating a vacuum of competitive new supply.p.3
• The 60% gap between renting and owning is the widest in over 20 years, versus a 39% long-term average.p.4
• 25.5% of units offered concessions, while national occupancy stood at 94.9%.p.5
• 93,300 apartment units were absorbed, one of the strongest Q1 performances in a decade.p.5
• Multifamily starts fell to 347,000 units as of October 2025 from a 2022 cycle peak of 529,000 units.p.6
• Sunbelt inventory has grown by 24% since 2019.p.7

Key insights

1. Homeownership costs $1,200 - $1,500 more per month than renting in most major U.S. metros.p.3
2. Dallas-Fort Worth is forecast to gain 529,000 net residents via in-migration through 2028.p.3
3. Year-over-year rent growth was -0.5% despite the demand rebound.p.5
4. Competitive JV equity is replacing the expensive 11%+ preferred equity of 2025.p.6
5. The Midwest posted 3.2% YoY rent growth on the lowest supply growth of any region at 1.7%.p.7
6. Omaha is seeing strong occupancy of 97%.p.8
7. Denver's available apartment units have increased by more than 23% since 2020.p.8