U.S. Apartment Market Gains Momentum as Occupancy and Demand Improve

Demand in the U.S. apartment market was quite strong in 2nd quarter relative to this time last year.

The April to June time frame typically marks the best performance in the U.S. apartment cycle, and 2026 was no exception. The nation absorbed more than 187,000 units in 2nd quarter, at a pace that was notably above average for this high-performance time of year.

Net move-outs at the end of 2025, however, left demand at about 271,300 units, which trailed the decade average of about 340,000 units, according to data from RealPage Market Analytics.

For the first time in three years, annual apartment supply volumes dropped below the decade norm. Roughly 340,200 units delivered across the U.S. in the year-ending 2nd quarter 2026, including roughly 77,700 units in the April to June time frame, specifically. This marks the sixth consecutive quarter of declining annual supply after deliveries peaked near 588,000 units in late 2024.

With supply trending downward, U.S. apartment occupancy has been able to recover a bit of lost ground recently. Occupancy was at 95.5% in 2nd quarter, up for a second consecutive quarter and a bit ahead of the decade average. Still, as demand continues to trail new supply, occupancy remained down 20 basis points (bps) for the year.

Rent Growth Intensified in 2nd Quarter

After inching up just a bit in 1st quarter, effective asking rents increased more notably in 2nd quarter, rising 1.4%. That said, recent increases weren’t enough to alleviate previous cuts, leaving prices 0.2% below year-earlier rates.

Concessions remain widespread. Roughly 24.6% of apartments were offering concessions as of 2nd quarter, with the average concession at 7.6%.

Annual Rent Declines Persist in Just One U.S. Region

The South is the only region nationwide still seeing annual price declines. Notably, the South also remains the only U.S. region with apartment occupancy below 95%. In every other region, occupancy was at roughly 96% or above in 2nd quarter.

Annual rent cuts were most pronounced in Sun Belt markets, where elevated supply volumes continue to outpace demand. San Antonio posted the steepest annual decline among the nation’s 50 largest apartment markets. Austin bumped up to the nation’s third-worst performance, followed by Denver. This is the first time Austin rent cuts have been less than around 7% since 4th quarter 2023.

Phoenix and Charlotte also remained under notable rent pressure, amid some of the fastest inventory growth rates nationally.

In Tampa and Las Vegas, pricing performance was further challenged by softer tourism demand, reflecting a broader pullback in discretionary consumer spending. Class C units in these markets were especially troubled, where reduced demand from service-sector and tourism-related workers contributed to annual rent declines of 6.6% in Las Vegas and 8.6% in Tampa.

Rent Growth Continues in Tech-Oriented Coastal Markets

Tech-oriented coastal markets continued to lead the nation in rent growth, supported by relatively limited new supply and resilient expansion in high-wage industries tied to artificial intelligence.

San Francisco posted the nation’s strongest annual rent growth at 10.6% in the year-ending 2nd quarter. That was nearly twice the increase in the second strongest performer: San Jose (6.1%). Virginia Beach ranked #3 for rent growth nationwide, while a third Bay Area market – Oakland – took the #4 spot.

New York fell out of its typical place among the nation’s top five rent growth performers, with annual price growth of 3.2%. As rent growth moderates in New York and strengthens in some smaller markets, New York has slowly descended the rankings.

Several supply-constrained Midwest markets also posted steady rent gains in the past year. Milwaukee recorded 3.4% rent growth, while Chicago saw a 2.9% increase. More modest gains around the 2% mark were seen in St. Louis and Minneapolis.