NAHB Special Report: Multifamily Market Braces for Rising Vacancies in 2026

Economists at the 2026 International Builders' Show predict rising multifamily vacancies and a cooling rental market as pandemic-era migration trends shift.

By: AXL Media

Published: Mar 11, 2026, 6:03 AM EDT

Source: https://www.multihousingnews.com/

The Vacancy Peak and Supply Collision

The national multifamily vacancy rate reached a historic peak of 7.3 percent in December 2025. This surge is attributed to a "supply-demand collision": while the frantic pace of new construction has passed its peak, a significant volume of units initiated during the 2022 boom is still hitting the market. This high inventory is meeting sluggish demand caused by reduced immigration and a softening labor market.

Regional Divergence: Supply-Constrained vs. High-Inventory Metros

The 2026 forecast highlights a sharp divide between markets based on their inventory levels:

Resilient Metros: Rents remained strong in supply-constrained markets like Chicago, New York, and Philadelphia, where development barriers limit new stock.

Softening Metros: Markets that saw an inventory explosion, such as Phoenix, Tampa, and Las Vegas, are experiencing rent stagnation or declines as they struggle to absorb new units.