The nation’s apartment market continued to strengthen during the second quarter as demand outpaced new supply over the past year for the first time since early 2022, according to Cushman & Wakefield’s U.S. Multifamily MarketBeat.
Net absorption totaled 124,600 units in the second quarter—the fifth-highest quarterly total in nearly 25 years and an 8% year-over-year increase. On a trailing four-quarter basis, approximately 362,000 units were absorbed compared with roughly 358,000 units delivered, marking the first time demand exceeded new supply since early 2022. The national vacancy also declined 35 basis points quarter over quarter to 8.9%, falling below 9% for the first time since 2024, noted the report.
“The apartment market is no longer defined by new supply pressures,” said Sam Tenenbaum, head of multifamily insights at Cushman & Wakefield. “Construction is slow, demand has remained remarkably resilient, and vacancy is now moving lower. That’s a meaningful shift from the conditions that shaped the market over the past several years and points to improving fundamentals as the pipeline continues to thin.”
The second quarter reflected the shrinking supply pipeline as elevated financing costs, construction expenses, and selective capital constrained new development.
During the quarter, 88,000 units were delivered nationally, down 27% year over year and more than 40% below the quarterly peak seen in mid-2024. Approximately 475,000 units are under construction nationwide, which represents 3.5% of existing inventory—the lowest level since 2013. Deliveries are expected to continue their decline through 2027. This will help boost occupancy gains as the existing supply is absorbed.
Other findings from the Cushman & Wakefield report include:
- New York posted the nation’s strongest demand in the first half of the year with approximately 19,500 units absorbed;
- After New York, several Sun Belt markets also were top demand performers. The Dallas-Fort Worth metroplex absorbed 18,600 units, followed by Phoenix with 17,000 units, Atlanta with 13,300 units, and Austin, Texas, with 13,200 units;
- National asking rents climbed 1.5% year over year in the second quarter, increasing from 1.1% in the first quarter; and
- The Bay Area leads the nation’s rent recovery, with San Francisco posting 13% annual rent growth. Neighboring San Jose and the East Bay experienced 7% and 4.8% annual rent growth, respectively.