New data from the Bureau of Labor Statistics’ January 2026 employment report shows average hourly earnings rising 3.7% year over year. Marcus & Millichap Senior Vice President John Chang has highlighted how this wage growth is feeding through to commercial real estate dynamics, with a particular focus on the apartment sector.
In a recent video titled “How Wage Growth is Reinforcing CRE,” Chang translates the wage data into household-level impact. He notes that a 3.7% wage increase for a full-time, 40-hour-per-week worker translates into roughly $230 in additional monthly income. Over the same period, average apartment rents have increased by about 1.5%, or approximately $28 per month.
According to Chang, this divergence between income and rent growth has been in place since the second quarter of 2023. Over that span, full-time employee wages have climbed by roughly $700 per month on average, while rent growth has added only about $66 in monthly housing costs. As a result, he argues that multifamily housing has actually become more affordable when measured as a share of income, despite public narratives suggesting otherwise.
Chang also points to increased apartment deliveries as another factor influencing the rent environment. Higher levels of new unit supply in multiple markets have applied downward pressure on rent growth, supporting the improvement in affordability. In combination with stronger wages, this has left many households with more discretionary income after paying for housing.
That extra capacity is showing up as “increased consumption, increased retail sales and increased savings,” Chang says. He characterizes the overall financial position of American households as still supportive of consumption and, by extension, broader economic growth. From his perspective, this underpins the outlook for demand across housing and commercial property types.
Chang stresses, however, that the figures he cites are averages and do not reflect every household’s experience. Some workers have not seen comparable wage gains, and certain consumers remain under financial strain. He also notes that weak consumer sentiment is currently holding back spending to some degree, even with stronger balance sheets in aggregate.
Looking ahead, Chang suggests that an eventual improvement in consumer sentiment could unlock additional spending, further economic expansion and incremental job creation. In his view, that sequence would translate into greater demand for both housing and commercial space and, over time, firmer real estate fundamentals. He concludes that there is “tremendous potential for improving commercial real estate fundamentals” and that a turn in consumer sentiment is a key indicator investors should monitor.
