The last few years were a necessary reset, and we all felt it.
Rate hikes hammered valuations through 2023, cap rates blew out, and some markets got completely buried under new supply. Sellers and buyers couldn’t even agree on what planet they were on, let alone price.
But that pain was the price of finding a real floor, which we finally hit in 2024. And since then, we’ve been inching our way back. Valuations steadied in 2025, deals started flowing again, and now, as we head into 2026, this recovery officially has some serious legs.
The setup couldn’t be better: millions of people need apartments because they’ve been completely priced out of homeownership, developers have essentially stopped building, and we’re witnessing a generational supply demand imbalance.
Needless to say, with this type of environment, we at RSN are very bullish about 2026.
National Multifamily Scorecard: 2025 in the Rearview, 2026 on Deck
The latest CBRE numbers confirm what we’ve been feeling all year. Vacancy crept up to 4.4% in Q3 because developers dumped 92,000 new units on the market while renters only absorbed 43,200.
That’s the weakest third-quarter absorption since 2022, and it explains why rent growth stalled at barely half a percent.
Job growth also cooled off and spooked everyone. Households delayed moving decisions. The whole market felt frozen.
Yet transaction volume tells a different story. Investors poured $108 billion into multifamily deals through September, up 19% from last year, once you exclude Blackstone’s huge AIR Communities buyout.
Smart money sees what’s coming: construction completions keep dropping each quarter, and developers are completely stuck. Either they can’t get financing at all, or the projects just don’t make economic sense anymore. The same plot of land that looked like a goldmine at 3.5% rates becomes a money pit at 5.5%.
The Sunbelt still digests excess supply, but even those pipelines will run dry soon. Vacancy stabilizes once these last projects deliver. Rents already turned positive mid-2025 after bottoming late last year.
2025 cleared the decks. 2026 brings the opportunities we’re positioned for.
The Supply Story: Today’s “Pain” Is Tomorrow’s Opportunity
Those 92,000 units delivered last quarter? They’re the tail end of the 2021-2023 building boom. Developers went wild when money was cheap, and now we’re digesting 474,800 units completed over the past twelve months.
No wonder vacancy ticked up, and rents stalled.
Where it gets even more interesting is how U.S. multifamily housing starts with five or more units were at a seasonally adjusted annual rate (SAAR) of 403,000 as of August (down 11% month-over-month and about 10% year-over-year). Permits also match that number exactly. Developers can’t get construction loans, land prices make no sense, and fewer and fewer want to build in this market.
Completions still outpace starts by 220,000 units annually, but that gap closes fast. Once these final projects are delivered, the pipeline goes bone dry. The West saw permits jump 35% year-over-year, but the South—home to the bulk of our target and existing markets—saw starts plummet 26.4%.
By 2026–27, even fewer new projects will be coming out of the ground, and existing well-located assets (ie, RSN’s sandbox) should benefit from healthier occupancy and pricing power.
Affordability Is Worse Than Ever… Which Supports Long-Term Rent Demand
Supply might be drying up, but demand keeps growing because it’s harder to afford to buy a house.
Home prices hit new records in 2025, even with mortgage rates stuck above 7%, which pushed the income needed to buy a median home to double what it was in 2019. That crushing reality explains why we just saw the fewest existing home sales since 1995—buyers simply quit trying.
Those priced-out buyers become lifetime renters. Yes, they spend 23% of their income on rent, but buying that same quality of life would eat over 30% of their paycheck, so they stay put. Harvard’s research backs this up, showing more cost-burdened renters than ever before, all trapped because homeownership moved impossibly out of reach.
This environment creates permanent demand for the types of properties we invest in. Rents climbed through every 20-year period since 1900, and even after the recent cooling, they’re still 20% above 2019. When buying stays this expensive, renting becomes the only option.
Demographics and Culture: Renting Is Becoming the Default, Not the Backup Plan
Those millions priced out of buying aren’t just waiting around anymore—they’re rethinking the entire premise. The median first-time homebuyer just hit 38 years old, up from 33 three years ago, and while everyone assumes it’s purely about affordability, something deeper is happening. People are finally questioning whether homeownership even makes sense at these prices and rates.
Gen Z is leading this shift because they never bought into the mythology in the first place. They make up 30% of all renters, and three out of four think renting is the smarter financial move. Many watched their parents lose everything in 2008 while clinging to the idea that real estate always goes up. They saw millennials spend a decade getting outbid on starter homes. So while boomers keep repeating that renting is throwing money away, Gen Z’s math says otherwise. At today’s rates, the carrying costs of ownership dwarf rent in most markets, and that’s before you factor in the opportunity cost of a down payment.
Even the wealthy have caught on. Houston’s millionaire renter population tripled since 2019, and New Jersey now has 39 suburbs where renters outnumber owners. These aren’t people who got priced out—they’re opting out. They’d rather keep their capital working in markets with diversification, yield, and more intelligent investment strategies than overburden themselves with the bulk of their wealth in a single illiquid asset.
The old assumption that everyone eventually graduates from renting to owning is dead. We’re watching a permanent shift in how Americans think about housing, and it’s creating exactly the rental demand that isn’t going away.
Why We’re So Bullish for 2026 and Beyond
You get it now. Supply vanishes, demand stays locked in, and millions of Americans have accepted renting as their permanent reality. The setup looks great from a multifamily investment perspective, but where exactly do you place your bets? What’s the best philosophy to take in a much broader and diverse sector than many realize, in one of the most interesting, nuanced markets of our time?
The Sunbelt Digestion Period Creates Our Entry Point
Yes, Texas and Phoenix got hammered with new supply. Atlanta and Charlotte saw cranes on every corner. Occupancy dropped 100 to 250 basis points below historical averages across many of our target markets. Plenty of investors ran scared.
But look what else happened. Charlotte, Houston, and Miami kept posting positive rent growth despite the supply tsunami. These metros still lead the country in job creation, wage growth, and people moving in. The fundamentals never broke—they just got temporarily overshadowed by delivery trucks.
CBRE expects Phoenix, Charlotte, and Raleigh to see supply peak right now, then watch vacancy tighten for several years straight. We’re buying into that recovery before everyone else figures it out.
Replacement Cost Math That Protects Your Downside
Developers can’t build what we’re buying. Construction costs jumped so high that new projects need premium rents just to break even. Tariffs alone added five figures per unit. Labor shortages pushed timelines out by months. Interest rates killed their construction loans.
We’re scooping up stabilized properties at markups considerably below what it would cost to build them today. Think about that protection—a developer would lose money competing with us unless rents jumped dramatically. They won’t even try.
Sellers need liquidity now because their loans mature or their partners want out. Their operational performance stays solid, but capital markets forced their hand. We solve their problem while locking in your margin of safety.
Good news, especially for sub-Class A, reasonably priced workforce units.
How RSN Plays the Recovery
We target proven deals that have cash flow today and appreciate tomorrow. Existing properties generating real income in Carolina suburbs, Atlanta’s workforce corridors, and Texas growth markets, where teachers and nurses need apartments. We focus on stabilized assets rather than ground-up development gambles or luxury towers, hoping for tech workers who might show up.
Our underwriting stays grounded in reality. We assume modest rent growth and keep our exit cap assumptions conservative enough that every deal works even if the recovery takes longer than expected. But when it accelerates on schedule, these properties are positioned to deliver outsized returns.
The value plays are simple: add washers and dryers, upgrade kitchens that haven’t changed since 2005, and fix the parking situation. Workforce renters care about practical improvements they can afford, not rooftop yoga studios. We deliver what matters while staying hundreds below new construction rents.
RSN owns what people need, bought at prices that lock in profit, in markets that keep growing regardless of headlines.
That’s why 2026 looks so good to us from here.
Looking Through the Noise to the 2026–2030 Opportunity
The headlines scream about affordability crises, rate uncertainty, and Sunbelt oversupply. We get it. The noise feels deafening right now, and it’s easy to see why investors feel nervous.
But headlines aren’t fundamentals. Renting stays cheaper than owning for millions of households who need places to live. Gen Z and Millennials embraced renting as a lifestyle, not a compromise. Construction starts collapsed while demand compounds. The supply crushing markets today becomes tomorrow’s shortage.
You’ve stuck with RSN through tough stretches, and that patience will pay off. We’re investing in quality workforce housing below replacement cost right when others retreat. Our markets keep adding jobs and residents. Our properties generate cash flow today and appreciate tomorrow.
The 2026 setup looks better than anything we’ve seen in a while, and as always, if you have any questions, feel free to reach out to us and ask. We’re an open book here, and truly appreciate your support. We couldn’t do what we do without you.
Here’s to 2026.
Reed Goossens is an Australian-born real estate entrepreneur, investor, author, public speaker, and an all-around good bloke. Reed got his start in real estate investing back in 2012 when he moved to the US.
