Apartment operators entered the 2026 spring leasing season hoping the industry had finally reached a turning point after years of record new supply and aggressive concessions. While few are calling what they’re seeing “a full recovery,” many believe the market is beginning to stabilize as deliveries slow and excess inventory starts to be absorbed.
While the multifamily sector has not fully returned to pre-supply-surge conditions, many said this year’s spring leasing performance represents the clearest sign yet that the market is normalizing.
“The 2026 spring leasing season has shown improvement over 2025, particularly in consistency of demand and leasing velocity,” said Marcie Williams, chief strategy officer at The Bainbridge Cos. “Overall, the environment remains competitive, but it feels more stable and less reactive than last spring.”
Leasing velocity has improved in several markets, concessions are becoming more targeted and renewal rates are strengthening as renters increasingly choose to stay put rather than absorb moving costs in an uncertain economy.
“Our 2026 spring leasing season is outperforming last year by a meaningful margin, with first-visit prospect traffic up roughly 41% year-over-year,” said Tammy Freiling, chief financial officer of property management at Kairoi Residential. “More telling than the traffic gain is what's happening at conversion: our leasing velocity has strengthened in tandem.”
Still, the gains have not been universal. Several companies note that local supply conditions continue to determine which markets are thriving and which remain under pressure.
Stephen Prochnow, executive vice president of property management for Mill Creek Residential, noted the spring season has been mixed, and very market-dependent.
“The story this spring is less about overall demand and more about where you sit relative to local supply,” Prochnow said. “In markets where we’re still competing against a concentration of lease-ups in close proximity, renters have a lot of choices and they know it.”
Supply burn-off starts to shift the market
One of the clearest themes emerging this spring is that the unprecedented apartment supply surge that weighed on the industry in 2024 and 2025 is beginning to moderate.
Operators in several Sun Belt markets said construction starts have slowed and new deliveries are finally being absorbed.
“We are beginning to see meaningful absorption in several markets, particularly in the Sun Belt regions that experienced the heaviest wave of new deliveries over the past 18–24 months,” Williams said. “Concessions are narrowing in select submarkets, however not eliminated, but more targeted and strategic rather than broadly applied.”
Kari Warren, chief operating officer of property management at Kairoi Residential, noted operators that avoided overusing concessions are now positioned to recover more quickly.
“Those who leaned heavily on concessions to chase occupancy are now facing compressed effective rents and NOI pressure that won't unwind quickly,” Warren said. “As new deliveries taper, that discipline is translating into measurable pricing power and a stronger foundation for long-term performance.”
At CAPREIT, Chief Operating Officer and Chief Transformation Officer Savas Karas said the firm is also seeing concessions gradually recede.
“Supply has been burning off as lease-up concessions are disappearing,” Karas said. “Concessions are generally decreasing versus increasing.”
The improving supply-demand balance is also beginning to support rental rate recovery in select markets, particularly at stabilized communities. While aggressive rent growth has not returned, some firms are testing modest increases and scaling back concessions as occupancy improves.
“We're seeing far more communities reach stabilization—in our own portfolio and across our submarkets—than we are seeing new lease-ups kick off,” Prochnow said. “Communities that have stabilized are starting to experiment with concession reduction and modest rent growth, which is encouraging.”
Some markets stabilize while others remain soft
While the industry is seeing signs of improving, the recovery remains highly uneven depending on local supply conditions.
For instance, Freiling noted Dallas-Fort Worth currently leads Kairoi’s portfolio.
“Kairoi is holding physical occupancy between 93% and 94.5% at select assets with zero concessions,” she said. “The same demand strength is showing up across other major Texas metros.”
Stephanie Garris, director and head of North Carolina at Arqline, said several Charlotte, North Carolina-area submarkets have started to stabilize.
“Areas like South End, LoSo, and Uptown Charlotte are seeing stronger leasing velocity as young professionals continue returning to amenity-driven urban communities,” Garris said. “Many stabilized assets have already reduced incentives from roughly 8-10 weeks free down to about 4-6 weeks.”
She added that suburban areas such as Huntersville, Cornelius and Lake Norman have absorbed inventory even faster because deliveries were more balanced.
In South Charlotte, Garris noted it has shown meaningful improvement this spring because of corporate relocations, strong employment growth and continued demand for mixed-use suburban communities.
Tim Bruss, managing director of asset management for Hamilton Zanze, said Utah, Virginia, Texas and Washington have also been among the firm’s strongest-performing markets this year.
At the same time, operators said several markets are still struggling with oversupply and elevated concessions.
Garris described NoDa in Charlotte as one of the region’s most competitive submarkets because of heavy class A deliveries. Bruss said Phoenix and Austin, Texas, remain soft despite early signs of improvement, while parts of Colorado are still working through elevated supply levels.
Even so, the fact that previously distressed markets are beginning to stabilize is an encouraging signal for the broader industry.
“As communities reach stabilization and available inventory continues to decline, we're starting to see leasing momentum improve in places that were most challenged 12 months ago,” Prochnow said. “Progress in the hardest markets is a good sign that the broader dynamic is shifting.”
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