Apartment construction falls to 550,000 units, a decade low

Apartment construction slowed again in the third quarter, leaving roughly 550,000 units under way nationwide, the lowest count in more than a decade, according to Marcus & Millichap's November 2026 housing research brief.

Renters absorbed more than 56,000 apartment units in the third quarter even as hiring slowed, the brief reports. The share of apartments offering concessions fell to 14.5% in September from 17% in May. Austin, Jacksonville, Fla., and Tampa, Fla., are markets where new supply is becoming more manageable and vacancy could post modest declines.

With a smaller share of landlords offering a month free or waived fees, advertised rents sit closer to collections, leaving less of a haircut for a buyer who underwrites a deal to market rents. Higher financing costs are the offset: sellers may need to accept lower valuations, the brief says.

Annualized, absorption at that quarterly pace runs near 224,000 units, well under half the roughly 550,000 under way. Units under construction deliver over several years, so the two counts are not directly comparable, but the gap suggests existing inventory is leasing faster than new supply is being started, which the brief describes as supportive for property fundamentals.

Multifamily sales reached their second-highest level in four years during the quarter on preliminary data, per the brief. As Private Wealth Daily previously reported, John Chang tied 7.3% mortgage rates to apartment demand, noting rents rose 1.9% over the past year while the monthly payment on a median-priced home climbed about 8%.

The brief says declining construction and strengthening cash flows could support rent growth and investor interest, while financing costs remain the hurdle for near-term dealmaking.