The June 2026 apartment concession data is striking by any measure. RealPage Market Analytics reports that the average U.S. apartment concession discount reached 11.1% – the deepest in more than 25 years. Nationally, 16.5% of stabilized units offered a concession. In our markets, aggressive Class A lease-up buildings are offering packages that in some cases exceed two months of free rent.

We want to say something clearly at the outset: we are feeling the effects of this environment. Some of our communities are offering concessions. Our investors know this, and we believe the right response is to explain the situation honestly, in the context of the data that tells us why it's happening, how long it is likely to persist, and what the path out looks like. That's the purpose of this piece.

There is no benefit to pretending the current operating environment is comfortable. There is also no benefit to catastrophizing a situation that is well-understood, data-supported, and has a clear resolution mechanism. What follows is our honest read.

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1) What the Data Shows: A 25-Year High That Needs Context

The June 2026 numbers from RealPage are the most current comprehensive read on concession activity across the U.S. apartment market:

• 16.5% of stabilized units offered a concession in June  – up 3.4 percentage points year-over-year and near the highest monthly rate since mid-2014.
• Average concession discount: 11.1% of annual lease value – up 0.2 points month-over-month and 1.8 points year-over-year. This equates to nearly six weeks of free rent on a 12-month lease and is the deepest average discount since the post-Global Financial Crisis period in 2010 – at its highest since the late 1990s (RealPage U.S. Apartment Concessions June 2026).
• Year-over-year the trend is still worsening in aggregate: both the share of units offering concessions and the average depth are higher than a year ago.

At the market level, the concentration is stark. Austin leads with 37.0% of stabilized units offering concessions at a 15.6% average discount – effectively nearly two months free. Phoenix follows at 15.1% average discount, Denver and Nashville each at 14.6% (RealPage Market Concessions June 2026). These are the most extreme cases, but the pressure is not limited to them.

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In our markets specifically:

• Dallas entered the top concession markets in June for the first time meaning competitive pressure from new Class A lease-ups in Dallas has intensified enough to move the overall market metric.
• Houston recorded widespread concession use with moderate average discounts – indicating broad deployment of incentives even if the depth is less extreme than Austin.
• Atlanta dropped off the high-pressure list in June – a genuinely positive signal that the worst of the supply pressure there may be clearing.
• Tampa remained near the monitoring threshold – not in the deep-pressure tier, but close enough to require careful attention. Zillow's June 2026 data shows Tampa with one of the larger year-over-year increases in the share of listings with concessions nationally.
• Charleston's profile remains more favorable – new construction starts are down 72% from peak (MMG Real Estate Advisors), and the market benefits from very limited new supply competition.

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Investor takeaway: The concession environment is real, it is present in our markets, and it is affecting our operations. Acknowledging that is the starting point for a credible analysis of what comes next.

In simple terms: Apartment concessions nationally are at levels we haven't seen in 25 years. In some cities, new luxury buildings are offering nearly two months of free rent to attract residents. Dallas and Houston – two of our key markets – are seeing this competitive pressure meaningfully. Atlanta looks like it may be turning the corner. Tampa is one we're watching carefully. We're not pretending this isn't happening – it is, and some of our properties are participating in it to stay competitive.

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2) Why This Is Happening: The Supply Wave Explanation

Understanding why concessions are at a 25-year high is essential to understanding when and how they resolve. The mechanism is specific and quantifiable.

Between 2021 and 2025, the U.S. apartment industry experienced its largest construction wave since the 1970s. Developers, responding to the post-pandemic demand surge and cheap capital, started hundreds of thousands of new Class A luxury units. RealPage data shows annual deliveries peaked at approximately 588,000 units in 2024 – more than at any point in modern apartment history. Those units don't all fill up immediately. When a new 300-unit Class A building opens in Dallas, it competes with every other new and existing apartment nearby for the same pool of renters. The tool it uses to win those renters is concessions: free rent, waived deposits, gift cards – anything that makes choosing the new building feel financially advantageous.

The problem is that multiple new Class A buildings opened in the same submarket in the same leasing season. They are all offering concessions simultaneously, each trying to outcompete the others. The collective effect is a concession arms race that depresses effective rents across the submarket – including at stabilized Class B communities nearby that didn't ask for this competition but feel it regardless. This is why we are offering concessions on some of our properties. Not because our assets are struggling fundamentally, but because the competitive environment created by Class A lease-up activity is making modest incentives necessary to maintain occupancy.

The class-level data from RealPage confirms this dynamic. Class A leads in average concession depth at 11.4%, with Class B at 10.7% and Class C at 11.3%. The modest Class B/Class A gap understates the real competitive dynamic because the Class A buildings driving the deepest concession activity are the newest, most aggressive lease-up properties – not the broader stabilized Class A universe. In submarkets where multiple new Class A buildings opened in 2023-2024, the concession packages we are competing against can run significantly deeper than the national Class A average.

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Investor takeaway: The concession pressure we're experiencing is not a reflection of weak asset quality or poor operations. It is the direct consequence of an extraordinary and temporary supply event – the largest apartment construction wave in 50 years arriving in a compressed timeframe and requiring aggressive incentives to lease up. That supply event is now behind us. The question is how long the residual competitive pressure persists.

In simple terms: Over the past few years, developers built more new apartments than at any time in recent history. All those new buildings opened around the same time and competed with each other – and with existing apartments – for the same renters. The tool they used to win that competition was free rent. That competition has spilled over to our properties. We're not immune to it. But this is a temporary situation created by a one-time supply event, not a permanent change in how the apartment market works.

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3) The Demand Side: Why Concessions Aren't a Demand Crisis

When an investor sees 25-year high concessions, the natural worry is that demand is collapsing – that renters can't afford apartments or are leaving the market. The data does not support that interpretation, and this distinction matters enormously for understanding the recovery timeline.

Several current data points confirm that demand is holding despite the concession environment:

• Zillow's June 2026 Rent Report shows the median household spending 27% of income on a new rental – nearly identical to the pre-pandemic norm of 26.3%. Renters are not being squeezed out of the market. The income needed to afford rent increased just 2.1% year-over-year, in line with wage growth.
• Wage growth has topped rent growth for 41 consecutive months (Jay Parsons, LinkedIn, July 2026). Renter affordability has improved, not deteriorated, over this period. Renters who are currently receiving concessions are receiving them because operators are competing for their business – not because they need financial assistance to afford the rent.
• Net absorption in 1H 2026 topped 250,000 units despite economic headwinds – above any comparable pre-COVID period (RealPage Q2 2026; Jay Parsons, July 2026). Apartment demand is holding at above-historical levels. The concession environment exists because supply is high, not because demand is low.
• RealPage Q2 2026 data shows national occupancy at 95.5% – a modest improvement for the second consecutive quarter. Vacancy is declining, not rising. The market is absorbing supply.

Supply-driven concessions and demand-driven concessions look identical on the surface but have very different implications. Supply-driven concessions – which is what we are experiencing – have a defined endpoint: when the supply that drove them leases up and the new construction pipeline remains constrained, concessions normalize. Demand-driven concessions – which would reflect structural economic weakness or population decline – are harder to resolve. The June data is unambiguously the former situation.

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Investor takeaway: The concession environment is uncomfortable, but it is occurring against a backdrop of resilient renter demand and improving affordability – not against a backdrop of distress. That is the critical context for assessing recovery timing. The problem is an excess of supply, not a deficit of demand. And excess supply has a mechanical resolution that is already underway.

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In simple terms: Here is the most important thing to understand about current concessions: they exist because there are too many new apartments competing for the same renters – not because renters are struggling financially. Renters are spending about the same share of their income on rentals before the pandemic. Wages are growing faster than rents. More people are renting than ever before. The problem is oversupply, not weak demand. That's a fundamentally different problem, and it resolves differently: the supply runs out, the competition eases, and the incentives go away.

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4) The Supply Pipeline: Why This Has a Defined Endpoint

The most important data for assessing how long the concession environment persists is not the current concession figures, it is the pipeline of future supply that will determine whether today's competitive pressure gets worse or better.

That data points clearly toward improvement:

• Annual multifamily deliveries have fallen for six consecutive quarters from the 588,000-unit peak, reaching 340,200 units in Q2 2026 – the first time in three years below the decade average (RealPage Q2 2026).
• Total housing starts hit a six-year low in May 2026 at an annualized rate of 1.177 million units, with multifamily starts plunging 40.2% to 295,000 annualized (Census Bureau/HUD, June 16, 2026; NAHB). This reflects genuine builder caution, not statistical noise – the NAHB builder sentiment index weakened further in June.
• Multifamily units under construction fell to 679,000 – down 8.1% year-over-year and dramatically below the December 2023 peak of over 1 million (Build Radicals/Census Bureau). The pipeline that will be completing in 12-24 months is significantly smaller than what has been delivering over the past two years.
• Construction costs remain elevated due to tariffs on steel, aluminum, and lumber, plus labor market pressure from the data center construction boom. NAHB confirms building materials are 34% more expensive than December 2020. Higher costs suppress new starts, extending the supply relief.

Marcus & Millichap's July 2026 analysis projects that declining residential deliveries will ease competitive pressure through at least 2027. Jay Parsons, in his mid-year multifamily assessment, identified the first half of 2026 as a likely inflection point in the apartment cycle – with vacancy improving at the fastest pace since 2021 per three independent data sources (Apartment List, CoStar, RealPage). The supply wave has broken. The question is not whether conditions improve – it is when.

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For our markets specifically, the supply easing is at different stages:

• ‍Atlanta appears to be the furthest along – absorbing supply faster than new units are arriving, dropping off the high-concession list in June, and projected by Marcus & Millichap to see 4.1% effective rent growth in 2026 (second-highest nationally).‍
• Houston is working through supply pressure in some submarkets while its record employment base (3.52 million total jobs projected by year-end, Greater Houston Partnership) continues absorbing units.‍
• Dallas-Fort Worth entered the concession pressure list in June – meaning supply pressure has intensified. DFW's exceptional employment growth (Goldman Sachs campus, Texas Stock Exchange, ongoing corporate relocations) provides the demand foundation to absorb supply, but the process will take time.
• ‍Tampa is in the monitoring tier – seeing increased concession activity but also posting strong vacancy improvement momentum per Jay Parsons' Q2 analysis. The two signals exist simultaneously: pressure now, improvement coming.
• ‍Charleston remains the least affected – supply is off 72% from peak and Google's $9 billion investment is bringing high-wage professional demand precisely as the supply drought arrives.

Investor takeaway: The supply situation has a defined and approaching endpoint. The construction pipeline that will compete with our properties 12-24 months from now is meaningfully smaller than what we are competing against today. That is the mechanical path to concession normalization – and it is supported by six consecutive quarters of declining deliveries, six-year-low starts, and the largest single-month drop in multifamily starts since 2009.

In simple terms: The new apartment construction that has been creating all this competition is slowing down dramatically. Fewer new units are being built now than at any point in years. The buildings that are already competing with us will eventually fill up and stop offering free rent. And the next wave of competition that would have replaced them is much smaller than what we've been dealing with. The timeline for this to play out is roughly 12 to 18 months based on current data.

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5) How We Are Managing Through This Period

We want to be specific about how we are responding to the current environment at the property level, because how operators navigate a concession cycle matters as much as the market conditions themselves.

We are prioritizing occupancy over asking price. The single worst outcome in a concession-heavy environment is holding firm on rent while vacancy rises. An empty unit generates no income. A unit leased with a concession generates real income and maintains the community's occupancy, which protects the asset's financial performance and NOI. We are making tactical, measured use of concessions where the competitive environment requires it – not blanket giveaways, but thoughtful incentives targeted at maintaining the occupancy levels that sustain our operations.

We are protecting renewals aggressively. Every renewal we capture is one fewer unit we need to fill at concession. The best concession management is keeping the residents we have. We invest heavily in the resident experience – responsive maintenance, clean and well-lit communities, transparent fees – because a resident who genuinely values their home is far less likely to leave for a competing building offering free rent. Renewal capture is our primary defense against concession exposure, and it is working: our renewal rates are outperforming market averages.

We are being clinical about pricing, not emotional. It would be easy to panic and offer deep concessions broadly. It would also be a mistake. We apply concessions where they are needed to compete – and only there – while maintaining pricing discipline elsewhere. Chasing the deepest Class A concession package is not our strategy; competing intelligently for the right resident at a sustainable price is.

We are maintaining conservative leverage. The concession environment creates cash flow timing pressure. Our conservative capital structures– with manageable debt service and appropriate reserves – mean we can absorb this period without being forced into distressed decisions. We built our deals to work through difficult periods, not just favorable ones.

We are watching the data, not the headlines. The vacancy data, absorption data, delivery data, and pipeline data all point in the same direction: the current environment is temporary and improving. We are managing with the long view – positioning to capture the recovery, not simply surviving the current moment.

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Investor takeaway: The way operators navigate a concession environment is a direct test of discipline and judgment. We are not pretending the pressure doesn't exist. We are managing it with clear eyes, the right priorities, and a strategy built for exactly this kind of cycle.

In simple terms: We are keeping our apartments occupied, even if that means offering some incentives right now. We are working hard to keep existing residents so we don't have to find new ones. We are being smart about where we offer concessions and where we don't. And we have the financial structure to weather this period without being forced to make bad decisions. This is what active, professional management looks like during a difficult part of the market cycle.

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6) What the Recovery Looks Like, And Why We Believe It's Coming

Concession burn-off is not a hope – it is a mechanical process with a quantifiable impact. Here is how it works and what it means for NOI:

When a property that has been offering, say, six weeks of free rent on a 12-month lease reduces its concession to zero, the effective annual rent collected from a new resident increases by approximately 11.5% – without any change in the advertised asking rent. That improvement flows directly to NOI. It happens automatically as the supply that created the competitive pressure leases up and the operator no longer needs to buy residents to fill units.

The leading indicators all point toward this happening on a 12-18 month timeline in most of our markets:

• ‍Vacancy improvement is accelerating. Apartment List, CoStar, and RealPage all reported vacancy declining at the fastest pace since 2021 in Q2 2026 (Jay Parsons, July 2026). Jay Parsons called the first half of 2026 a likely inflection point in the cycle. Vacancy improvement is the precursor to concession normalization.
• Absorption is strong. 1H 2026 net absorption topped 250,000 units (RealPage Q2 2026) – above any pre-COVID comparable period. The units being delivered are being absorbed. Each absorbed unit is one less actively competing for our residents.‍
• Deliveries are declining. Annual deliveries in Q2 2026 were the first in three years below the decade average. Every quarter of declining deliveries means the future competitive supply is smaller.‍
• Rent momentum hit a four-year high. Quarter-over-quarter effective rent change in Q2 reached a four-year high per both CoStar and RealPage (Jay Parsons, July 2026). Momentum is the leading indicator, and it is positive for the first time in years.‍
• Even the hardest-hit markets are recovering. Austin – Exhibit A for oversupply – saw its year-over-year rent decline improve from -7.5% in March to -3.9% in June: a 360-basis-point improvement in three months (Jay Parsons, July 2026). When the most damaged market starts healing, the broader recovery is genuine.

Parsons summarizes the inflection clearly: "We're still in a hole, but now we're starting to dig our way out." That is an honest framing. We are not yet out of the hole. But the direction has changed, the data is consistent, and the mechanism that produces the improvement – supply falling while demand holds – is already in motion.

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Investor takeaway: The recovery is not a narrative – it is the mechanical outcome of declining supply meeting stable demand. The data we are tracking every month increasingly supports the view that the worst of the concession environment is behind us or very close to being behind us in most of our target markets. We are managing to be in the best possible position when conditions normalize.

Plain English: Here is why we are confident the current situation improves: fewer new apartments are being built, the ones that were just built are filling up, and renter demand hasn't gone away. When a new building fills up, its free rent offer disappears. When our building doesn't need to match that offer, our effective income goes up. That process is starting. It won't happen overnight. But the data says it's coming, and the markets that peaked first are already showing the improvement.

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7) What We're Watching Next

• Monthly concession data by submarket: We track RealPage's market-level concession reporting for DFW, Houston, Atlanta, Tampa, and Charleston. The key milestones are Atlanta staying off the high-pressure list, Houston's moderate-discount profile holding, and Tampa not deepening further.
• Dallas and Houston Class A lease-up pace: The primary driver of competitive pressure in our two largest Texas markets is Class A buildings working through extended lease-up. We track occupancy at recently opened competitors monthly when they stabilize, they stop offering two months free, and our competitive environment improves directly.
• Vacancy trajectory: Vacancy improvement is the gating variable for concession normalization. We watch Apartment List's monthly vacancy data, which reported four consecutive months of improvement through Q2 – the first time since 2021.
• New delivery volumes in Q3 2026: If the start-level slowdown from May's six-year low translates to meaningfully lower Q3/Q4 deliveries, the pipeline relief arrives sooner. We watch Census Bureau monthly permit and start data as the leading indicator.
• Our own renewal rates: The most direct measure of how we're navigating this environment is our renewal capture rate. We track this monthly at the property level and across the portfolio.
  

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Our 2026 Playbook

• Markets: Dallas–Fort Worth, Houston, Atlanta, Tampa, Charleston – markets with diverse employment and domestic in-migration that we believe will absorb current supply pressure faster than markets without those fundamentals.
• Acquisition edge: Below replacement cost with day-one or near-term cash flow. In a concession environment, a conservative basis protects NOI. Rising construction costs continue to widen the gap between what we paid and what it costs to build new competition.
• Value creation: Livability-first capex: kitchens, LVP flooring, lighting, bath refresh, smart access, pet amenities, package rooms, safety lighting, and landscaping. Renovated communities with genuine livability advantages can compete with fewer concessions than unimproved properties.
• Operations: Renewal-centric mindset, responsive maintenance, transparent fees, and disciplined pricing. We use concessions tactically where needed and minimize exposure through retention.
• Capital structure: Conservative leverage and appropriate reserves so we can manage through the current environment without forced decisions, and multiple exit paths based on data, not headlines.

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Bottom Line

The June 2026 apartment concession data is at a 25-year high. Some of our properties are offering concessions to remain competitive against aggressive Class A lease-up buildings in our markets. We want to be honest about that. Here is the full picture: this situation exists because the apartment industry built more new units in 2021-2024 than at anytime in 50 years, and those units all hit the market around the same time, competing aggressively for renters. The competition has spilled over to our Class B communities. The good news is that this is a supply problem, not a demand problem. Renters are still paying a normal share of their income on rent. Wages have grown faster than rents for three and a half years. Net absorption remains above historical norms. The supply wave is breaking: deliveries are falling, starts are at six-year lows, and the pipeline of future competition is shrinking. As the new buildings currently offering two months free fill up and stop competing, our effective rents improve – often without any change in asking price. The data says that process has started. We are managing our properties to maintain occupancy through this period and to be positioned to capture the full recovery when the supply pressure clears – which the data suggests is a 12 to 18 month story from here.

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