National Multifamily Rent Growth Cools in Early 2026
Multifamily rent growth across the U.S. has reportedly cooled to begin 2026 as new supply enters urban markets and absorption slows. While Chicago has outperformed many peers with 7% year-over-year growth, the national trend is causing operators to shift focus from aggressive rent hikes to preserving occupancy.
- While national rent growth is modest, with some forecasts projecting a 1.2% increase for 2026, Chicago stands out with annual rent growth projected between 3.0% and 3.6%. - The supply of new apartments in downtown Chicago is expected to remain low, with no more than 3,000 new units anticipated between 2025 and 2027; this is a stark contrast to previous years when developers often delivered that many units annually. - Nationally, the multifamily vacancy rate is projected to be around 8.5% in 2026, influenced by a significant pipeline of new supply still being absorbed in many regions. - Several new high-profile residential buildings are scheduled to open in Chicago in 2026, including office-to-multifamily conversions like 111 Point in River North (153 units) and Wacker Place in the Loop (252 units). - With the market softening nationally, many operators are shifting focus from pushing rent growth to maintaining occupancy, often through the use of concessions like one to two months of free rent, especially during the slower fall and winter leasing seasons. - Renter preferences in 2026 are increasingly driven by lifestyle considerations, with high demand for flexible lease terms and units designed to accommodate remote work, featuring office nooks or dedicated workspaces. - In contrast to the robust growth in Sun Belt cities in prior years, markets like Austin and Phoenix are now seeing rent declines of -5.1% and -3.3% respectively, due to oversupply, making the Midwest a more stable region for growth.
