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The 2027 Multifamily Outlook: Why Forecasters Are Getting More Optimistic

Posted by Livable Content Team on Nov 10, 2026 9:00 AM

For much of 2026, the multifamily story was oversupply. Heavy deliveries, flat rents, and deep concessions kept owners on the defensive. That's starting to change. In early November, CoStar Group raised its 2027 rent growth forecast and lowered its vacancy outlook, pointing to stronger-than-expected demand and a construction pipeline that keeps shrinking. Here's what the latest forecasts say about 2027, and what they mean for property managers finalizing next year's plans.

For much of 2026, the multifamily story was oversupply. Heavy deliveries, flat rents, and deep concessions kept owners on the defensive.

That's starting to change. In early November, CoStar Group raised its 2027 rent growth forecast and lowered its vacancy outlook, pointing to stronger-than-expected demand and a construction pipeline that keeps shrinking.

Here's what the latest forecasts say about 2027, and what they mean for property managers finalizing next year's plans.

1. Rent Growth Forecasts for 2027 Are Moving Up

CoStar Group now projects national rent growth of 2.6% by the fourth quarter of 2027, up from its previous forecast of 1.9%. It expects annual rent growth to hold at 1.4% through the end of 2026 (CRE Daily, November 3, 2026).

Grant Montgomery, CoStar's national director of multifamily analytics, said the upgrade reflects "the substantial progress made this year in absorbing excess inventory accumulated during 2024 and 2025," adding that "demand has exceeded expectations" (Business Wire via Finviz).

What it means: 2.6% is modest, but it would be a meaningful step up from the roughly flat rents most markets saw in 2026. It's worth building into 2027 budgets cautiously, not counting on it.

2. New Supply Keeps Shrinking

The biggest driver behind the brighter outlook is supply. CoStar projects new apartment deliveries will fall 18% in 2026 to about 434,000 units, then drop another 19% in 2027 to about 352,000 units (CRE Daily, November 6, 2026).

The pipeline behind those deliveries has thinned too. Apartment starts fell to roughly 55,000 units in the first quarter of 2026, the lowest quarterly total since 2011 (Multifamily Executive).

What it means: fewer new buildings competing for residents in 2027. Properties that spent 2026 matching lease-up specials from new construction should feel less of that pressure as the year goes on.

3. Vacancy Forecasts Have Improved Since Spring

One way to see the shift is to track how CoStar's own vacancy forecast has changed over 2026:

Forecast dateExpected national vacancy, end of 2026Expected national vacancy, end of 2027 May 20268.8%8.4%, after peaking in early 2027 August 20268.2%8.1% November 2026About 7.9%7.5%

Sources: Multifamily Executive (May 12, 2026); CoStar Group (August 12, 2026); CRE Daily (November 3, 2026).

In six months, the expected year-end vacancy rate came down nearly a full percentage point. Different data providers measure vacancy differently, so these figures are best compared with each other, not with other sources.

4. Concessions Haven't Gone Away Yet

The improving outlook hasn't reached concessions. According to Apartment List, 31.3% of U.S. multifamily properties advertised at least a month of free rent in September 2026, up from 25.4% a year earlier (CRE Daily, October 26, 2026).

The split between markets is stark. In Austin, 57.4% of properties advertised a month or more free, compared with 1.1% in Chicago.

What it means: the forecasts point to a tighter 2027, but in many markets residents still have leverage today. Concessions are likely to ease unevenly, market by market, rather than all at once.

What Property Managers Can Do Now

  1. Budget for modest growth, not a rebound. Forecasts are improving, but 2.6% rent growth is still below the pace owners saw earlier in the decade. Plan 2027 conservatively and treat any upside as a bonus.

  2. Protect occupancy through the winter. The tighter market is forecast for 2027, not today. Strong renewals now keep you positioned to benefit when demand catches up with supply.

  3. Watch your local supply pipeline. National forecasts average very different markets. Track what's still under construction near your properties, since that will shape your concessions and pricing more than any national number.

  4. Revisit concessions market by market. With some metros at more than half of properties offering a month free and others near zero, a single concession policy across a portfolio is likely leaving money on the table somewhere.

  5. Tighten control of operating costs. Even with better rent growth ahead, expenses remain the line item owners can act on today.

The Bottom Line

2027 is shaping up to be a better year for multifamily than 2026. Forecasters are raising rent growth expectations, vacancy projections keep improving, and construction starts recently hit their lowest level since 2011. The operators who hold occupancy and control costs now will be in the best position to benefit.

Want to see how your properties can strengthen NOI in 2027? Book a Discovery Call.

Data Sources

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