Continental Properties Forecasts Multifamily Rent Recovery Through 2028 as New Supply Normalizes

Continental Properties, a National Multifamily Housing Council Top 10 developer, owner, and operator, has released its 2026 rental housing outlook, projecting a recovery in multifamily real estate fundamentals through 2028 as the market absorbs the aftereffects of an unprecedented wave of new apartment supply.

In the outlook, Jim Schloemer, CEO and Co-Founder of Continental Properties, characterizes the current moment as an inflection point for apartment investment, citing data from RealPage, Yardi, and John Burns Real Estate Consulting, as well as insights from the National Multifamily Housing Council (NMHC) and Multifamily Executive.

Historic Supply Wave Pressures Multifamily Rent Growth

The multifamily real estate sector has navigated one of its most challenging supply environments in decades. According to the outlook, approximately 1.42 million new apartment homes were completed between 2023 and 2025, with completions peaking in 2024 at 584,000 units — 92% higher than the five-year pre-pandemic average of 303,000 units. The firm noted this level of new supply has not been seen since the mid-1980s.

The surge in deliveries pushed national rent growth from a positive 0.4% at the end of 2024 to negative 0.6% in 2025, according to RealPage data cited in the report. Sun Belt markets bore a disproportionate share of the pressure, with markets including Phoenix, Denver, and Austin experiencing more significant rent declines. Compounding the revenue headwinds, inflation drove operating expenses higher — particularly for insurance and taxes — causing net operating income to turn negative in many markets.

To maintain occupancy during the oversupply period, many property managers prioritized occupancy over rent growth by offering concessions such as free rent to attract and retain residents, the outlook noted.

Supply Pipeline Contracts Sharply, Setting Stage for Recovery

Continental Properties points to a significant contraction in the development pipeline as a key driver of the anticipated recovery. Apartment starts, which peaked at approximately 580,000 units in mid-2022, declined to only 260,000 units during 2025. Units under construction fell 50% from an early 2023 peak of 1.1 million units to 534,000 units at the end of 2025.

Projected deliveries in 2026 are estimated at 316,000 units — a 46% decrease from the 2024 peak and nearly in line with the pre-pandemic average. The firm attributes the pullback in development activity to reduced availability of construction debt and institutional equity investment.

As completions normalize in 2026 and demand remains stable, the outlook projects national rent growth turning positive by year-end 2026, with growth settling near 3% annually in 2027 and 2028. The firm notes that apartment deliveries will be further constricted in 2027 and 2028, just as current supply is expected to be fully absorbed.

Structural Demand Supports Long-Term Multifamily Fundamentals

Despite near-term headwinds, Continental Properties highlights several structural factors supporting long-term demand for rental housing. The U.S. continues to face a housing shortage, with some estimates placing the gap at approximately 5 million units. Affordability constraints in the for-sale housing market have channeled demand toward rental housing at a higher rate than historical norms, the firm noted.

Workforce-attainable rental communities have particularly benefited from the affordability dynamic, according to the outlook. The firm also noted that consistent U.S. economic demand for housing has helped sustain occupancy even during the elevated supply period.

At the NMHC Annual Meeting, a speaker cited in the report observed that "more wealth has been created in real estate in the inflection of cycles than during normal or even robust market conditions."

Continental Properties Portfolio and Development Activity

Continental Properties was founded in 1979 and operates across multifamily, retail, and hospitality properties. The firm has developed 137 apartment communities encompassing more than 37,000 apartment homes across 20 states. In addition to its development portfolio, the company has strategically acquired nine apartment communities to expand its national footprint.

Looking ahead, the firm projects that increasing revenue, combined with cooling operating expense inflation and construction costs, points to a materially improved outlook for newly completed and stabilized apartment properties in 2027 and 2028. The firm added that even if interest rates remain elevated, portfolio values should increase as operating income rises.

Sources

Continental Properties — 2026 Rental Housing Outlook: Insights from Jim Schloemer, CEO and Co-Founder of Continental Properties