Welcome back to What's Hot, What's Not C.R.E. — your daily pulse on commercial real estate in America. It's Monday, February 2nd, 2026. Today we're diving into the latest residential and multifamily data — and the supply wave is finally receding.
🔥 What's Hot — Supply Wave Cresting, Fundamentals Tightening: Apartment completions dropping sharply: 422,000 units forecast for 2026, down from 536,000 in 2025 — a 21% decline. Construction starts plummeted since 2022 peak — fewer new units means tighter supply ahead. National vacancy expected to ease from 8.5% to 8.4% in second half of 2026. Bay Area leading rent growth: San Francisco at 5.9%, San Jose at 3.4%. Chicago multifamily tightening — vacancy falling, rent growth outpacing national. Dallas net absorption outpaced new supply for first time since 2021. Mortgage rates dropped to 6.18% as of late January.
❄️ What's Not — Sun Belt Oversupply Still Digesting: Sun Belt markets still absorbing heavy 2024-2025 deliveries — many newly delivered units remain unleased. Los Angeles median rent dropped to four-year low. National rent growth still modest — CoStar projecting only 1% by year-end 2026. Vacancy nationally still elevated at 8.5%. Markets like Austin, Phoenix, Tampa still tenant-favorable with concessions ongoing.
💡 Investor Takeaway: The 2026 multifamily story is clear: supply is finally receding. Target markets with limited new construction — Midwest and Northeast metros leading rent growth. Bay Area and Chicago showing strength. Sun Belt oversupply will take until late 2026 to absorb. The window to acquire before fundamentals tighten is narrowing.
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