New data from CBRE indicates that U.S. multifamily fundamentals improved modestly in the third quarter as rent growth returned alongside a slowdown in new supply. The firm’s latest research reports that average asking apartment rents increased by 1% year-over-year and 0.5% quarter-over-quarter, bringing the national average to $2,268. CBRE attributes much of this rent growth to stronger performance in the Midwest, Northeast and Pacific regions.
Among major markets, San Francisco posted the largest annual rent gain, with average rents rising 9.4% over the past year. While the report does not break out additional metro-level results, it notes that these regional improvements were sufficient to support a modest national rent increase despite continued supply deliveries and a softening in demand compared to the prior year.
On the development side, CBRE’s figures show that multifamily construction completions totaled 84,300 units in the third quarter. This volume was 11% lower than in the same quarter of 2025, underscoring that the recent wave of supply is beginning to recede. Even with the slowdown, completed units still exceeded net absorption for the first time since the fourth quarter of 2025.
Because new deliveries outpaced demand, the national vacancy rate ticked higher. CBRE reports that overall vacancy increased by 40 basis points during the quarter to 4.7%. Net absorption totaled 8,747 units in the third quarter, down sharply from 42,166 units a year earlier. The firm expects net absorption to continue to fall in upcoming quarters as the development pipeline winds down further.
Capital flows into the multifamily sector remained active, with CBRE measuring a substantial increase in transaction volume. According to the report, U.S. multifamily investment volume surged 140% year-over-year to reach $112.3 billion in the third quarter. However, CBRE notes that this spike was heavily influenced by a single large corporate transaction, the $69.6 billion merger between Avalon Bay and Equity Residential, which significantly boosted the aggregate volume figure.
Commenting on the outlook, Kelli Carhart, Head of Multifamily Capital Markets for CBRE, said in a statement that the sector is entering a period where peak supply is in the rearview mirror and rent growth is positioned to strengthen. She added that these conditions set the stage for a gradual recovery in transaction activity as the market adjusts to a slower pace of new construction and investors reassess multifamily opportunities in light of improving fundamentals.
