National multifamily fundamentals continue to improve as the unprecedented wave of apartment construction subsides. CBRE, Cushman & Wakefield and CoStar all report that renter demand is now catching up with — and in some cases surpassing — new supply after nearly two years of record deliveries.
CBRE found that net absorption exceeded completions during the first quarter of 2026, while Cushman & Wakefield reported demand outpaced new deliveries on a trailing four-quarter basis for the first time since early 2022. CoStar similarly concluded that the national market has largely worked through the worst of the supply surge, though absorption still trails deliveries slightly over the past 12 months.
The improving outlook is being driven primarily by a sharp slowdown in new development. CBRE reported apartment completions declined 30% year over year, while Cushman & Wakefield found deliveries fell 27% and the national construction pipeline dropped to its lowest level since 2013. CoStar estimates annual deliveries will decline another 27% in 2026 as the number of units under construction has fallen by more than half from its 2023 peak.
CoStar shows approximately 618,400 apartment units under construction in the first quarter of 2026, down nearly 20 percent from early 2021 and almost half the 1.17 million-unit peak recorded in early 2023. Development remains concentrated in the Sun Belt, which accounts for 31 percent of all units under construction, followed by the Southwest at 22 percent. The Northeast represents 20 percent of the national pipeline, while the Midwest and West Coast account for 15 percent and 12 percent, respectively.
Although rent growth and investment activity remain below the highs reached during the pandemic, both appear to be stabilizing. CBRE reported national rents growth averages were essentially flat year over year but noted pricing has likely found a floor, while Cushman & Wakefield observed the first acceleration in rent growth since mid-2025 as occupancy improved. CoStar likewise believes rent growth has bottomed, with the strongest 2026 performance occurring in supply-constrained Midwest and coastal markets while oversupplied Sun Belt metros continue to work through excess inventory.
Investment sales remain selective, but all three firms point to improving investor confidence. Following a steep decline in transaction volume during 2023, when annual sales fell to just $86.7 billion, investors returned in force over the next two years. CoStar recorded $114.5 billion in apartment sales during 2024 before volume climbed to $130 billion in 2025 across 17,885 transactions, a 14 percent increase in dollar volume from the previous year.
That recovery, however, has come with a reset in pricing rather than a return to peak valuations. CoStar data shows that national transaction counts increased 27 percent in 2025 while the number of apartment units sold rose 32 percent, yet the average sale price declined to $139,000 per unit, down from $161,000 a year earlier and below the post-pandemic highs. In other words, liquidity has recovered faster than valuations. Investors are once again deploying capital, but only after prices adjusted to reflect a higher-cost borrowing environment.
Pittsburgh's multifamily market remains one of the more balanced apartment markets in the Midwest despite a modest softening over the past year. During that time, developers delivered 1,840 units while net absorption totaled 1,813 units, leaving supply only marginally ahead of demand. Vacancy increased 70 basis points year over year to 5.7 percent, but that remains well below the national average of 8.1 percent. The pressure has been concentrated almost entirely in new luxury product, where vacancy has climbed to 9.8 percent, while mid-tier and workforce housing continue to post much healthier occupancy rates of 4.9 percent and 4.5 percent, respectively. CoStar expects vacancy to drift only slightly higher before stabilizing as the construction pipeline continues to shrink.
The Pittsburgh market continues to benefit from disciplined construction. Roughly 1,840 units were delivered over the past year, but CoStar shows only 1,963 units remain under construction—representing just 1.8 percent of existing inventory, well below the national benchmark of 2.6 percent. Tall Timber Consulting, which specializes in hyper-local knowledge of regional construction, shows that nearly 3,255 units have started construction since 2025, still well below the national growth benchmark.
This restraint, whether self-imposed or the result of local challenges, is quite remarkable. For instance, while multifamily developers across Pennsylvania have faced the same high interest rates, elevated construction costs and tighter lending standards, many of the state's secondary markets have continued to build at a steadier pace.
CoStar data shows the combined apartment pipeline in markets including Lehigh Valley, Harrisburg, Lancaster, York, Reading and Scranton has remained near 5,000 units under construction, while Pittsburgh's pipeline has contracted to fewer than 2,000 units. Remarkably, Lehigh Valley region has roughly the same number of units underway as Pittsburgh, despite having about a third of Allegheny county’s population.
The contrast suggests that capital has not abandoned Pennsylvania's apartment market—it has become increasingly selective, raising questions about whether local economic and development conditions are playing a larger role in Pittsburgh than financing alone. But that restraint shelters the market from big swings and doesn’t entirely eliminate development.
Several notable apartment developments continued advancing across the Pittsburgh region in 2026. The Esplanade has emerged as one of the Pittsburgh region's most significant multifamily developments. After years of planning, Piatt Companies officially broke ground in December 2025 on the approximately $740 million mixed-use development, which is expected to be completed by 2029. Beyond retail, entertainment, office, hotel, and public spaces, the residential component will include more than 750 apartments across two buildings, a 14-story condominium tower with approximately 126 units, and a commitment that 20 percent of all residential units will be affordable to households earning around 80 percent of the area median income.
In the spring, Woda Cooper officially broke ground on Smithfield Lofts, a nearly $30 million office-to-residential conversion at 4 Smithfield Street in Downtown Pittsburgh. The project will create 46 apartments, including 39 affordable units, and is one of several developments included in the Commonwealth's downtown revitalization initiative. Around that same time, Pittsburgh Regional Transit announced it had selected Pennrose LLC as the development partner for the Dormont Junction Transit-Oriented Development, a proposal calling for approximately 180 apartments adjacent to the light rail station. The project entered exclusive negotiations and the public planning process following approvals by both the PRT Board and Dormont Borough Council.
Momentum also continued in the East End. On June 16, 2026, Walnut Capital presented plans to the Pittsburgh Planning Commission for the first phase of its Bakery Square expansion, replacing the former Club One shopping plaza with a six-story mixed-use building containing 199 apartments. Company representatives described the development as the first phase of a multi-year expansion, marking a shift away from previously planned office construction toward residential development.
Rent fundamentals remain healthy despite softer leasing conditions. Average market asking rent reached $1,460 per month, up 2.5% over the past year, outperforming the national average of 1.0% while remaining approximately 23% below the U.S. average. Downtown Pittsburgh continues to command the region's highest rents at nearly $2,000 per month, while suburban and workforce-oriented submarkets have generally posted stronger occupancy and rent growth than luxury developments.
While apartment construction has remained restrained, asking rents continue to move higher across nearly every corner of Allegheny County. CoStar's daily rent data shows every major submarket posted positive rent growth over the past year, led by Monroeville at 4.8 percent, followed by Parkway East at 3.5 percent and Greater Downtown at 2.9 percent. Even the county's weakest-performing submarkets finished the year with higher asking rents than where they began, suggesting demand remains robust.
Investors have remained active, with approximately $297 million in multifamily sales over the past year. Activity has been driven largely by private capital targeting Class B and C assets, although headline transactions—including JRK Property Holdings' $122.5 million acquisition of Edge 1909 in the Strip District—demonstrate continued demand for high-quality institutional assets.
CoStar recorded 282 reported multifamily sales across the region over the past three years, with 96 occurring in the most recent 12 months alone. South Allegheny led all submarkets with 75 transactions, followed by East Pittsburgh with 61, suggesting investors remain willing to deploy capital where they see durable demand and long-term value.
In terms of pricing, Downtown occupies a tier of its own. Disclosed sales averaged approximately $279,000 per unit over the past three years, reflecting its concentration of newer, institutional-quality assets. Beyond the urban core, pricing declines sharply. North Allegheny averaged roughly $155,000 per unit, while South Allegheny, Butler County and most suburban submarkets generally traded between $75,000 and $85,000 per unit. Markets including Washington, Beaver, Lawrence and Armstrong counties largely changed hands for less than $70,000 per unit.
Nationally, the apartment market appears to be emerging from one of the largest construction cycles in its history. Pittsburgh never experienced that same surge. Instead, the region entered the downturn with a comparatively modest pipeline and is emerging with rents still rising, vacancies below the national average and investors continuing to transact across the market. With only a handful of new major builds on the way, the market remains in a health position for the rest of 2026 and likely through next year.
