Yardi Matrix estimates that multifamily housing completions for 2026 will increase 4.8% more than previously forecast, as the supply is seen declining in 2027 before rising again in 2028.
The estimate for 2026, spelled out in a new bulletin, reflects updates to under-construction and completion data rather than a material change in forecast outlook. The bulletin notes that the mid-2026 runup in longer-term interest rates and inflation contributed to a slowing in new development momentum as the year progressed.
“The mid-year runup in longer-term interest rates and inflation may be impacting new-development momentum. This year’s new-development activity is increasing, but as the year has progressed it has increased at a decreasing rate,” the report says.
Looking to next year, Yardi Matrix reports that “the number of units under construction and in pre-lease continues to decline, suggesting that 2027 new supply will be below 2026 levels.” New supply in 2028 will increase relative to 2027 levels given current completion times.
Considering persistent fiscal deficits and elevated interest rates that suppress multifamily valuations but support income growth and employment trends, the longer-term forecast “assumes continued steady but unspectacular growth economic activity that supports continued household formation and absorption of new multifamily supply,” the bulletin states.
“The near-term forecast assumes the overall economic backdrop remains largely unchanged. Sizeable U.S. fiscal deficits support moderate income growth, employment and household formation. The continuing Iran war and the AI buildout keep inflation elevated. As a result, the forecast assumes longer-term interest rates remain elevated while the federal funds rate is modestly increased.
“High-supply markets with weak or negative advertised rental rate growth will see continued reductions in market-rate supply, with affordable and mixed-income properties delivering more supply than some market observers might expect. Markets experiencing positive advertised rental rate growth will continue to maintain or incrementally increase new supply,” the report says.
Read the full Yardi Matrix bulletin here.
