Green Lights Signal an Encouraging 2026 Multifamily Outlook

Article originally posted on Multifamily Executive on January 20, 2026

It may be standard practice for some to greet the new year – any new year – with declarations of guarded, cautious or restrained optimism. Yet in many respects that fairly describes this moment for multifamily investors.

That’s a topline assessment from Walker & Dunlop’s Kris Mikkelsen, the firm’s executive vice president and co-head of their national Capital Markets group. Since assuming leadership of the investment sales team in 2020, he has helped grow it from a regional boutique to a nationally respected platform with over $70 billion of volume transacted during that time.

What’s Mikkelsen’s outlook for 2026? Will the new year continue on a similar trajectory as 2025? The veteran industry leader recently shared his views.

How did 2025 play out in your view? Did the year end on a high note?

For the most part, yes. The beginning of the year started slowly, despite a belief that a lot of deferred transaction activity from 2023 and 2024 would happen. It didn’t quite work that way. By mid-year volume numbers started to pick up again. Through September, transaction activity has improved by 40% over the same period in 2024. However, that growth is really more a statement about just how subdued 2024 was.

What role will interest rates play in 2026?

If you go back to our investor sentiment surveys of 2023 and 2024 you see a lot of hope around rate relief. There aren’t many decision makers making their 2026 plans based on that same hope. I think we’ve adjusted to this rate environment.

Given that, what is your outlook for 2026?

My approach is to look at the multifamily segment through two lenses: operating fundamentals and capital flows. Capital flows are largely positive. We’re seeing more liquidity coming back to the market every day. More retail capital is coming back into the market on the equity side. There’s more activity from separately managed accounts. There are more open-ended funds operating today than there were six to nine months ago. More closed-end fund raising is happening. Those are all very positive indicators.

And operating fundamentals?

That picture varies by region. In some Sunbelt markets you may be asking ‘Where is the near-term growth?’ It’s true those markets have absorbed a significant amount of inventory, but it took some heavy concessions to get there. That eats into NOI. The picture is better in the Midwest. If you have capital that’s trying to generate near-term cash flow, markets like Kansas City, Indianapolis, Columbus in the Midwest are a great place to be. Fundamentals in Gateway markets, where you saw supply constrained through the last development cycle, are healthy. Boston, for example, kept supply in check, maintained strong operating fundamentals, and was our most active sales market in 2025.

Any other signs you’re tracking for an improved 2026?

Capital flows are steadily improving. Equity capital flows are seeing more activity across both institutional and private capital. The increased caps from the agencies will be helpful for multifamily financing markets. After so many questions around the direction of the economy, we are seeing real resiliency. 4.3% GDP growth in Q3, unemployment ticked down to 4.4% and inflation decelerated through the second half of the year. Those are healthy indicators. We need that resiliency to continue into the new year and lay the foundation for recovery in operating fundamentals.

Bottomline: We have green lights around capital flows and now an even more positive outlook around a material recovery in operations. That paints a positive picture for 2026. We know the long-term demand for shelter will remain, even in the age of AI!