Many developers expect multifamily rent growth to continue in 2026, but the outlook isn’t the same across all markets. Some markets may see stronger rent growth as new apartment construction slows. Other markets may still have many new apartments available, which can put pressure on rents. Therefore, builders and developers should evaluate local markets rather than rely on national trends.
Strong multifamily housing demand doesn’t always lead to higher rents. If a market has high demand and enough apartments available, landlords may need to keep rents competitive. Markets with high demand and fewer new apartments may have more room for rent increases.
Where multifamily rents are expected to grow in 2026
Builders should review individual markets rather than assume multifamily rents will grow everywhere. Yardi Matrix’s Summer 2026 outlook provides year-end growth predictions for specific metro areas. Philadelphia’s projected growth is 2.9% while the Twin Cities’ is 4.6%. Meanwhile, Orlando’s is projected to decline by 4.0% and Phoenix’s by 6.2%. Other predictions are as follows:
- Kansas City: 3.9%
- Detroit: 4.0%
- Chicago: 4.1%
- Dallas: -4.3%
- Austin: -5.2%
- Denver: -5.9%
Markets with large amounts of new apartments can still experience less rent growth, even when demand is reasonable. According to Yardi, several high-supply Sun Belt markets have strong leasing activity but still experienced downward rent pressure because inventory grew faster than demand. Strong demand doesn’t always lead to higher rents if new units are completed faster than residents can rent them.
Multifamily rent growth varies by market
Multifamily rent growth depends on conditions including renter demand, household formation and the availability of existing and new apartments.
Builders should not only chase markets with the highest projected rent growth. They should also consider land costs, construction costs, land-use regulations and competition for development sites.
Slower construction could change the supply picture
The pace of multifamily construction could eventually influence rent growth. After several years of strong apartment construction, developers are now starting fewer multifamily projects. The National Association of Home Builders (NAHB) expects multifamily starts to decline in 2026. However, many units that began construction earlier are still being completed and entering the market.
Fewer starts don’t automatically reduce the number of available apartments. Projects already under construction can continue adding units to the market for months or years. If construction remains slow, the number of new units entering the market could eventually become more limited.
Markets with a large amount of new supply may eventually see that pressure ease as the existing development pipeline is completed. Meanwhile, markets with fewer new apartment projects may have fewer units available to meet future demand. These factors could support rent growth, but the outcome will still depend on local demand and the number of apartments available.
Multifamily housing demand still matters
The National Apartment Association’s (NAA) 2026 outlook argues that high mortgage costs can continue to push potential homebuyers toward renting, supporting apartment demand. The NAA also expects construction starts to slow, which could improve pricing power as new supply decreases.
However, demand alone doesn’t guarantee fast rent increases in every market. According to Yardi’s current research, first-quarter 2026 absorption was about 72,000 units. This is below the approximate 136,000-unit quarterly average of the previous two years.
Builders should avoid treating renter demand or population growth as the sole reason for new construction. Instead, they should evaluate who will rent the apartments and how quickly the market can absorb them.
What the outlook means for builders
For builders and developers, the 2026 rent projection is a reason to review individual markets rather than assume rent growth is universal. Before starting a multifamily housing project, they should consider how many new apartments are already being built, how quickly existing units are being rented and whether local demand can support additional housing.
Project costs are also important. A market with strong rent growth may look appealing, but higher land, construction and labor costs can affect whether a project makes financial sense. Builders may need to weigh expected rental income against the cost of developing and operating the property.
The outlook remains encouraging in some areas, especially where demand is growing as new construction slows. Local conditions should still influence development decisions.
Look beyond the rent-growth trends
Multifamily rent growth may continue in 2026, but builders shouldn’t assume it will be the same across all markets. Local renter demand, the amount of new housing and the pace of construction will continue to impact how much rents increase.
The national outlook is a good starting point for developers and builders, but local market conditions provide a better picture of a project’s potential. Keeping track of supply and demand can help builders identify markets where new multifamily construction can grow.
Sources:
1. Yardi Matrix: U.S. Multifamily Outlook, Summer 2026
2. National Association of Home Builders: Multifamily Market Expected to Cool in 2026 as Vacancies Rise
3. National Apartment Association: 2026 Apartment Housing Outlook
