Apartment Occupancy in DC Slips Below U.S. Norm, While Supply Pipeline Eases

View of the U.S. Capitol building framed by autumn trees with yellow leaves lining the street.
Photo of Carissa Brown, Real Estate Writer
by   Carissa Brown
  Posted   March 19, 2026
  in   Washington, DC

Washington, DC’s apartment market is undergoing a notable shift as occupancy – once consistently above the national norm – has now slipped below it.

Occupancy in Washington, DC dipped to 94.7% in February 2026. That’s a shift from most of the past three years, when occupancy in Washington, DC ran a range of 10 to 120 basis points (bps) above the U.S. average before sliding in line and, more recently, below the U.S. norm.

Line graph showing occupancy rates in Washington, DC and U.S. from Feb 2023 to Feb 2026, highlighting a dip in DC.

Still elevated supply partnered with a sharp downturn in demand weighed on occupancy. Developers completed about 10,700 units in 2025, expanding inventory by 1.5%. Nevertheless, deliveries have slowed over the past four quarters, with only 1,866 units completing in 4th quarter 2025, trailing the five‑year quarterly average of 3,170 units.

Meanwhile, the construction pipeline keeps ratcheting down. Just 11,794 units were underway as of 4th quarter 2025, nearly 70% below 2022 levels. Even so, that volume of completions is scheduled lift the existing base by another 1.7%. About half of under construction units are slated to deliver in 2026, pointing to sub‑1% inventory growth – well below the 2010s-decade annual average of 1.7%.

Bar chart showing annual supply and demand in DC from Q4 2020 to Q4 2025, indicating falling demand.

On the other side of the supply/demand equation, demand fell sharply in 2025. The market logged demand for only 1,055 units in calendar 2025, with net move‑outs accelerating in the second half of the year. Demand in 2025 was significantly behind DC’s annual average absorption volume topping 12,300 units in the past five years.

With pressure on occupancy, DC operators cut effective asking rents 0.3% in February, underperforming both the U.S. increase of 0.3% and the South region’s 0.1% rise. In February, DC was one of only six top‑50 markets still posting monthly rent cuts. Year-over-year, operators reduced rents 1.8%, at a faster pace than the U.S. average (-0.4%) but slightly less than the South region norm (-2%).

Line graph showing year-over-year effective asking rent changes in Washington, DC and the U.S. from Feb 2023 to Feb 2026.

Historically, from 2011 to 2020, U.S. rent growth often tracked above DC, then DC rent growth pulled ahead of the U.S. in mid‑2023 before slipping back below the national pace. Even with recent softness, the average monthly rent in DC was $2,218 in February, which marked a premium over the U.S. average of $1,864.

Although Washington, DC’s brief occupancy lead ahead of the U.S. has reversed under soft absorption and still‑meaningful deliveries, there is good news. A shrinking pipeline should limit future supply pressure in 2026. If absorption stabilizes, occupancy should stabilize and rent performance should follow.

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