Phoenix apartment market improvement cracks top 10 nationally as vacancy drops, construction slows Article originally posted on Phoenix Business Journal on July 13, 2026 The Phoenix metro’s apartment market has been recovering from oversaturation and it has become one of the nation’s most improved markets in that regard. CoStar found last month that Phoenix is among the top 10 most improved multifamily markets in the country, based on annual improvement from June 2025. While rents remain slightly lower, the Valley’s apartment occupancy has improved year-over-year, and CoStar reported that the city saw a decline in vacancy rates from 12.3% to 11.7% year-over-year. The majority of submarkets analyzed by CoStar are still at higher vacancy rates than their established stabilized vacancy rates. Vacancy rates are projected to continue to decline, to 10% in 2027 and 9.5% in 2028. CoStar also found that supply and demand conditions improved in Phoenix from negative 1.6% in June 2025 — meaning the balance was tipped toward the supply side — to positive 0.1% in June 2026. Additionally, the share of inventory under construction decreased 2.6% from 6.6% to 4% year-over-year, and rent growth momentum improved from -1.5% last year to -0.2% in June. CoStar forecasts rent growth to go into the green from the second quarter of 2026 onwards. Concessions are also projected to moderate. According to Apartments.com, the average rent for a one-bedroom apartment in Phoenix is $1,300, some 22% below the national average, and 3.6% lower than last year. Northmarq noted a couple months ago that a slowing pace of new multifamily unit deliveries was was “giving some short-term relief to the supply-side pressures that have dragged on market performance in recent years.” It noted that about 1,800 units came online in the first quarter, which was a drop of nearly 25% from the same period in 2025. Valley apartment market still has stiff competition More than 26,000 new apartment units were under construction at the time of Northmarq’s report, with almost half of those slated to come online before the end of 2026. Northmarq said that despite the decline in deliveries, the competitive impact of that new supply will continue to play a significant role in the Valley’s multifamily market this year. Across the U.S., the remaining markets in CoStar’s top 10 for improvement included three in Northern California (San Francisco, San Jose and East Bay), Milwaukee, Jackson, Denver and Austin, Texas. Similar to Jacksonville, Austin also has declining vacancy and a slowdown in new construction that has allowed demand to begin closing the gap with supply for both cities. Find Complete Article Here: https://www.bizjournals.com/phoenix/news/2026/07/07/costar-most-improved-multifamily.html