Article originally posted on Multifamily Executive on Oct 9 2026

The national apartment market continues to improve, with the vacancy rate falling to its lowest level as renter demand outpaces new supply, according to Cushman & Wakefield’s third-quarter report.

National multifamily vacancy dropped 30 basis points quarter over quarter to 8.6%, the third consecutive quarterly decline. Absorption reached nearly 350,000 units through the first nine months of the year, up 14% year over year and the strongest total for the first three quarters since 2021. Meanwhile, apartment deliveries dropped 25% year over year to approximately 250,00 units. This has helped boost annual asking rent growth to 2.3%, its fastest pace since the first quarter of 2023.

“The multifamily market is benefiting from a meaningful shift in balance between supply and demand,” said Sam Tenenbaum, senior economist, investor insights, at Cushman & Wakefield. “Apartment demand has remained resilient even as new construction has slowed considerably. We’re now seeing that combination translate into lower vacancy and stronger rent growth across a growing number of markets.”

National net absorption is being supported by continued household formation and the affordability gap that remains between renting and buying a home.

According to Cushman & Wakefield, Texas remained a major driver of demand, with three of the nation’s five leading markets by absorption—Dallas-Fort Worth with over 50,000 units absorbed to date; Austin with 34,000 units; and Houston with 26,000 units. New York, with 37,000 units absorbed to date, and Phoenix, with 31,000 units, also led the nation.

New apartment supply continues to decline. Less than 480,000 units remained under construction nationally at the end of the third quarter—this is the lowest share since 2013 and less than half of its recent peak. In addition, more than 70% of the 90 markets Cushman & Wakefield tracks reported smaller pipelines than a year ago. Some of the largest declines are being seen in markets that experienced strong development during the previous cycle, including Austin; Phoenix; Sarasota, Florida; and Savannah, Georgia.

“The construction slowdown is becoming an increasingly important part of the multifamily recovery,” added Tenenbaum. “Many of the markets that absorbed substantial new supply over the past several years are now seeing their development pipelines contract. If demand remains near current levels, that should create additional room for occupancy and rents to improve as fewer new apartments enter the market.”

As the recovery broadens, national rent growth is accelerating, although it remains below its pre-pandemic average. The West had one of the strongest turnarounds, with annual rent growth increasing from 0.6% at the end of 2025 to 2.6% in the third quarter. Cushman & Wakefield cited the Bay Area as a significant driver of that increase, with San Francisco leading the national with nearly 16% annual rent growth, followed by San Jose, 9%, and the East Bay, 6.9%. The South also returned to positive rent growth, reaching 1.1% year over year in the third quarter. The Northeast led the nation’s year-over-year rent growth in the third quarter at 3.7%, followed by the Midwest at 3%.