The Signal
Apartment starts peaked in 2022 and fell sharply afterward. CoStar reports approximately 55,000 U.S. apartment starts in Q1 2026, 73% below early 2022 and the lowest quarterly level since 2011. Marcus & Millichap’s May 2026 outlook describes starts roughly 75% below their peak and units underway back at 2016 levels. These are broad multifamily measures, not a separate 75% Sun Belt-only estimate.
The Sun Belt remains central to the supply adjustment. Marcus & Millichap reports that about half of completions since early 2021 were in Sun Belt metros. Reduced starts will limit future competition, while recently completed properties still need renters.
National deliveries peaked at 696,000 units in 2024 and fell to 531,000 in 2025. CoStar’s July 2026 update forecast about 421,000 for 2026. The final figure is a forecast, not a completed-year count. We do not combine it with a percentage from another forecast update to derive a 2027 total.
Our Read
The financing problem is the wait between less supply and stronger property income. Yardi Matrix’s Summer 2025 outlook already anticipated positive rent growth in 12 high-supply markets by year-end 2027. That is an earlier published forecast, not evidence that recovery has just slipped another year.
The Federal Reserve raised its target range by 25 basis points to 3.75–4.00% on September 16, 2026. That later decision cannot explain the earlier Q1 starts decline.
Demand deserves the same care as supply. Redfin reports Tampa net domestic migration of 10,544 in 2024 versus 34,920 in 2023, a decline of about 70%. This measures net domestic migration during those years, not all arrivals or a 2026 reading. In January 2026, Census projected roughly 321,000 net international migrants for July 2025–June 2026 if recent trends continued, compared with an estimated 1.3 million in the preceding year. That conditional projection is not a realized count.
For lenders, test debt-service coverage under slower local rent recovery and actual loan terms. For developers, a smaller pipeline is a reason to examine competing inventory, demand and financing together. Owners approaching maturities should size extension needs against property-level cash flow rather than assume a regional supply decline guarantees higher rents.
CoStar/Apartments.com — Q1 2026 construction update: https://www.businesswire.com/news/home/20260512667993/en/Apartments.com-and-CoStar-Release-a-Multifamily-Construction-Activity-Update-for-Q1-2026; Marcus & Millichap — Multifamily Outlook, May 2026: https://www.marcusmillichap.com/research/research-brief/2026/05/research-brief-multifamily-outlook; Apartments.com/CoStar — Mid-Year 2026, July 23, 2026: https://www.apartments.com/grow/learning-center/state-of-the-market-mid-year-2026-webinar; Yardi Matrix — Summer 2025 National Report: https://www.yardimatrix.com/media/downloads/file/7373-MatrixMultifamilyNationalReport-Summer2025?signup=false; Federal Reserve — September 16, 2026 FOMC statement: https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm; Redfin — Slowing migration, 2024 versus 2023: https://www.redfin.com/news/slowing-migration-florida-texas-2024/; U.S. Census Bureau — January 2026 migration estimates and conditional projection: https://cdn.www.census.gov/newsroom/blogs/random-samplings/2026/01/historic-decline-in-net-international-migration.html
Apartment starts peaked in 2022 and fell sharply afterward. Lower supply helps only if owners can finance the wait for local rent recovery.
