- Wage growth and cooling inflation have strengthened real incomes, supporting new household formation.
- Rental affordability has reached its healthiest level in six years, easing rent burdens for many Americans.
- Reduced move-outs to single-family homes are deepening the apartment rental demand pool.
- Demographic trends and shifts in living arrangements continue to favor multifamily demand.
Wage Growth and Affordability Trends
RealPage reports that the US apartment market enters 2026 with several economic factors on its side. Strong wage growth, especially when paired with cooling inflation, has resulted in real income gains for renters. This positive trend allows more households to form, as rent burdens have lightened. As of 2026, the share of income spent on rent for new leases is at its lowest level since 2018/2019, marking the fourth consecutive year in which wage growth outpaces rent growth and improving overall apartment market signals.
Single-Family and Multifamily Dynamics
Apartment renters are renewing leases at near record rates, with fewer transitioning to single-family homeownership. While mortgage rates and home prices have seen slight adjustments, the cost gap between renting and owning remains wide. These conditions are prompting renters, including those in Class A apartments, to stay put longer—bolstering multifamily occupancy and providing a tailwind for the apartment market.
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Demographic Support for Apartments
The apartment market is also buoyed by demographic trends. The population of 18- to 34-year-olds continues to grow, with more than 1.18M added in this group since 2018. Additionally, many traditional triggers for homeownership, such as marriage and starting families, are occurring later in life. The portion of young adults living alone has increased, further reducing concerns about household “doubling up” and supporting steady apartment demand. At the same time, steadier rent levels and consistent wage gains are beginning to make renting more manageable for a wider range of households.
Potential Upside Scenarios
Although headwinds, like a sluggish labor market, remain, corrections in employment or more young adults moving out from family homes could add further demand. While not guaranteed, these upside risks should not be discounted as the apartment market navigates 2026.
