Market Analysis · May 2026 | Daniel Kaufman | danielkaufmanrealestate.com

Let me be direct about what the April 2026 multifamily data is actually saying, because I don’t think most people in this business are reading it correctly.

Rent concessions across stabilized U.S. apartments hit 16.9% in March — the highest level since 2014. The national average rent sits at $1,730, up a meager 0.5% year-over-year, the weakest April performance since 2014 outside of COVID. And in the supply-saturated markets that dominated the last development cycle — Austin, Denver, San Antonio — annual rents are down 4.1%, 3.3%, and climbing concession rates are approaching one-third of total inventory.

This is not a correction. This is not a soft landing. This is what happens when you build into a cycle without disciplined underwriting, and then try to maintain occupancy on the back end by effectively cutting your rent without calling it a rent cut.

THE MECHANISM: CONCESSIONS ARE A RENT CUT WITH BETTER PR

Six weeks of free rent on a 12-month lease is an 11.5% effective rent reduction. Operators know this. They also know that showing a higher face rent on a lease and burying the discount in a concession line preserves their comp stack — at least temporarily. It protects their renewal pricing. It protects their refinance story. But it doesn’t change the economics of what a tenant is actually paying.

When 21.5% of Class C units are offering concessions, that’s not a promotional tactic. That’s a market signal. Workforce housing — the asset class that’s supposed to be insulated by structural undersupply at the affordable end — is leading the concession wave. That tells you the pressure is broad-based and isn’t isolated to the luxury-heavy, overbuilt Sun Belt submarkets everyone loves to point at.

Class A saw the sharpest monthly uptick in concessions. Even well-located, amenity-rich assets are leaning on incentives to maintain occupancy. The supply wave doesn’t discriminate.

BY THE NUMBERS

• Concession usage: 16.9% of stabilized units — highest since 2014
• Average discount depth: 10.8% (~6 weeks free on a 12-month lease)
• National average rent: $1,730 (+0.2% MoM, +0.5% YoY)
• Annual rent growth: weakest April since 2014 outside the pandemic year
• Class C concession rate: 21.5% | Class B: 15.0% | Class A: 14.5%

WHERE SUPPLY IS WINNING OUTRIGHT

The regional split is the most instructive part of this dataset. The South (21.2% concession rate) and West (16.4%) — regions that absorbed the lion’s share of 2021–2024 multifamily deliveries — are paying the price. The Midwest (10.2%) and Northeast (12.6%), which largely missed the construction frenzy, are holding. That’s not coincidence. That’s supply and demand doing exactly what supply and demand does.
Austin, Denver, and San Antonio top the list with roughly one-third of units offering concessions and discount depths hitting 14.8% in Austin and Denver. Austin is down 4.1% annually. Denver is down 3.3%. Jacksonville and Tampa are trending in the wrong direction. Texas metros are broadly the worst of it.

THE COUNTERINTUITIVE STORY: WHERE CAPITAL SHOULD ACTUALLY BE LOOKING

While the Sun Belt markets generate the headlines, the real story in the April data is what’s happening in the markets that didn’t overbuild. Chicago posted the largest year-over-year jump in rental competitiveness of any major metro — nine renters per available unit, 95.2% occupancy, 0.06% of total stock added in new supply. That’s the environment where landlords don’t need concessions. That’s the environment where rent growth is real and durable.

San Francisco led all major metros with 7.3% annual rent growth. The Midwest broadly posted 2.0% YoY growth while the South was declining 1.1%. This is the classic case of capital following heat and getting burned — and the disciplined markets quietly outperforming.

The small markets tell an equally important story. Wichita posted a 14.6-point year-over-year surge in rental competitiveness. Amarillo and El Paso are seeing double-digit RCI increases driven by stagnant supply and steady demand. These aren’t markets that get pitched in boardrooms. But they’re performing.

WHAT I’M TAKING AWAY FROM THIS DATA

The concession economy has a clear cause: too much supply delivered into markets that ran out of demand absorption capacity before construction pipelines ran out. Until those pipelines clear — and they are starting to slow — landlords in those markets will keep giving rent away and calling it strategy.

The answer isn’t to avoid multifamily. The answer is to be rigorous about where you’re operating and what your real effective rent looks like net of concessions. A $2,200 face rent with 6 weeks free is a $2,003 effective rent. Underwrite accordingly.

The markets I’m watching right now are the ones where supply restriction is structural — not cyclical. Midwest metros with high renewal rates and minimal new deliveries. Secondary markets tied to stable employment bases. And — counterintuitively — certain gateway markets like San Francisco where the permitting environment has been restrictive enough to create genuine scarcity even in a softer demand environment.

The operators who will win over the next 24 months are the ones who know the difference between a concession as a temporary lease-up tool and a concession as a permanent feature of their pro forma. Right now, too many in this business are pretending they can’t tell the difference.

THE BOTTOM LINE

Five consecutive months of positive national rent growth sounds encouraging until you realize the annual number is 0.5% and the trend is decelerating. The headline obscures a market that is bifurcating sharply between supply-constrained markets compounding gains and supply-saturated markets giving them back.
Rental competition nationally dipped marginally — from 75.7 to 75.4 on the RCI. But Chicago is at 88.8. Wichita is at 91. These are not the markets getting the capital. They should be.
I’ve spent 25 years watching capital cycle through the same mistakes — overpaying in the hot market at the wrong point in the cycle, overlooking the boring market at exactly the right moment. The April 2026 data is the boring markets quietly outperforming. Pay attention.

Daniel Kaufman is the Principal & CEO of Kaufman & Company, a vertically integrated real estate development and investment platform. Views expressed are the author’s own based on publicly available market data. danielkaufmanrealestate.com