The Supply Setup: Why Today’s Heavy Deliveries Could Lead to a Landlord’s Market by 2026

Multifamily is sending a mixed signal that actually favors disciplined investors: lots of completions right now, but far fewer new projects starting. If you own (or buy) quality, renovated communities through this transition, you could be entering the sweet spot of the cycle.

What the data says (and why it matters)

Two truths can be—and are—true at once:

1. Deliveries remain elevated. The industry just notched its 10th consecutive quarter with more than 100,000 units completed, capping a historic run of new supply. That has kept certain submarkets competitive in the near term.

2. New starts have fallen sharply. After peaking during the boom, apartment construction activity has dropped to a 10-year low as higher rates, tighter lending, and input costs squeezed feasibility. 

In NMHC’s September 2025 Construction & Development Survey, firms cite ongoing obstacles—financing, permitting/entitlement, and staffing—that slow or cancel ground-up projects. Fewer starts today mean fewer lease-ups tomorrow.

Cycle math: why a thin pipeline is bullish for existing assets

As the delivery wave rolls off, the market typically transitions from oversupply → balance → scarcity. In that last phase, owners of well-located, renovated assets benefit from:

➤ Tighter vacancy as renters have fewer brand-new options
➤ Pricing power without heavy concessions
➤ Stronger renewal capture, since replacement units are limited and pricier

This effect is magnified in Class B value-add: you’re below Class A rents yet delivering a “new-enough” experience, so households trading down (or staying put) find compelling value.

Timing the turn (2026–27 window)

The delivery machine doesn’t stop overnight. But because starts collapsed while completions stayed high, there’s a lag—today’s projects finish, then the pipeline thins. Industry trackers note deliveries should remain elevated into 2025 and fade thereafter, setting up a tighter 2026–27 backdrop if demand holds.

How we’re positioning Faris investors

Our approach is built for this setup:

➤ Buy below replacement cost in high-demand, landlord-friendly metros (Atlanta, Tampa, Charleston).
➤ Renovate what residents value (unit interiors, lighting, access, pet amenities, package solutions) instead of chasing low-use luxuries.
➤ Operate for renewals: service, transparency, and cleanliness to keep the rent roll stable while the market tightens.
➤ Conservative underwriting that doesn’t rely on rate cuts or heroic rent assumptions—just normalizing concessions and steady absorption as supply eases.

What to watch in the data

➤ Absorption vs. completions: We expect the gap to narrow as the new-build surge fades. RealPage already shows deliveries rolling off from their 2024 peak in several regions.

➤ Starts & permits: Continued weakness here signals fewer 2026–27 lease-ups competing with us. Census/NMHC are the primary tells.

Bottom line for investors

Today’s headline—“Lots of supply!”—is real. But tomorrow’s headline—“Not much new coming!”—is already baked in. If you want to benefit from the scarcity phase rather than compete against it, the moment to allocate is before the pipeline runs dry.

We’re doing exactly that.

👉 Reserve priority access to the next Faris deal (no obligation; first look when we open)

👉 Book a 15-minute call to see if our approach fits your goals

Sources:
GlobeSt, “Apartment Completions Hit 10th Straight Quarterly Record in 2025” & “Construction Surge Levels Off After Two-Year Boom”; GlobeSt, “Apartment Construction Reaches 10-Year Low”; NMHC, “Quarterly Survey of Apartment Construction & Development Activity — September 2025”; U.S. Census Bureau, New Residential Construction — August 2025 (5+ unit starts SAAR); Freddie Mac, 2025 Multifamily Outlook; GlobeSt analysis on record 2025 completions.