The national multifamily vacancy level is predicted to increase to 8.2% by the end of this year before easing to 8.1% at the end of 2027, according to a new forecast by Apartments.com, an online marketplace of CoStar Group Inc. (NASDAQ: CSGP). Stabilized vacancy is predicted to stay flat for the remainder of 2026 before rising modestly in early 2027 with the market absorbing excess inventory created over the past two years.
The new forecast is pointing to 0.8% apartment rent growth from 0.8% in the second quarter of 2026 to 1.4% in the third quarter, an upward revision of 70 basis points from the previous forecast. The projected metric for the fourth quarter was also adjusted upward, from +0.5% to +1.9%.
“The near-term rent growth outlook reflects second-quarter rent trends slightly exceeding expectations,” said Grant Montgomery, national director of multifamily analytics at CoStar Group. “The upward revision of second-half 2026 rent growth is driven by stronger employment assumptions and the significant progress made in the first half of the year in absorbing the excess inventory accumulated across 2024 and 2025, enabling market conditions to gradually tighten.”
However, Montgomery warned that “elevated energy prices tied to ongoing conflict in the Middle East continue to erode household spending power and present a downside risk to apartment demand. Longer term, slower labor force growth could constrain employment gains and household formation. Offsetting these risks, the apartment sector continues to benefit from a structurally undersupplied housing market and a rapidly slowing construction pipeline, which could support stronger-than-expected occupancy and rent growth.”
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