RealPage's economists forecast national effective apartment rents to rise about 2.4% from the fourth quarter of 2026 to the third quarter of 2027. That would be a clear step up from the 0.9% year-over-year gain the same firm measured for the third quarter of 2026. It is a forecast, not a result, and it rests on a supply wave that is running out.
What happened
On October 12, RealPage published its third-quarter market forecast. Its headline: national effective rents should rise about 2.4% over the four quarters from 4Q 2026 to 3Q 2027. The firm's October 6 data update supplies the backdrop. Year-ending third-quarter demand reached nearly 304,800 conventional apartments, while completions reached nearly 318,000, about 46% below the late-2024 peak of nearly 588,000. The gap between the two is just 13,000 units, the narrowest since late 2015.
Occupancy averaged 95.4% in the third quarter, and about 22.7% of apartments still offered a concession, averaging 7.5%. So the market is balanced, not tight. The forecast is a bet that new supply keeps shrinking while demand holds.
The spread across markets is wide. RealPage's forecast has San Francisco and Milwaukee at 3.8% and Phoenix at 3.7%. About 64% of the top 50 markets fall between 2% and 2.9%, including Dallas, Austin, Chicago, Boston and Seattle. Seven markets are near 1%, including New York, Washington, DC, Fort Worth and Atlanta, and Houston (0.5%) and San Antonio (0.8%) are lowest. No top-50 market is projected to see declines.
New supply is not gone. RealPage expects about 320,000 apartments to be delivered over the next four quarters, with Dallas the largest at just over 20,000.
The forecast comes with caveats. Payrolls added 152,000 jobs in the quarter, about 51,000 a month, with September at 29,000, and average hourly earnings grew 3% year over year, down from 3.5% at midyear. Rent forecasts depend on renters keeping their jobs and paychecks.
Why it matters for property managers
The pricing power is shifting, slowly. Concessions are still common. But a narrow demand-supply gap suggests concessions may be easier to pull back in markets where deliveries are fading. The firm's own numbers show regions diverging: in the third quarter the Midwest led with rents up 2% year over year, while the South was the only region with annual rent cuts and the only one with occupancy below 95%.
One national number hides very different local stories. A manager with units in Phoenix and Atlanta is looking at two separate renewal strategies, because the forecast for those markets differs by more than two points.
Renters are not leaving the rental pool quickly. Redfin reports pending home sales fell 4% month over month in September, the biggest monthly drop in more than three years, and that the weekly average mortgage rate reached 7.28% at the end of September, the highest in three years. High ownership costs tend to support renewals. That is an inference, not something either source states.
What to do this week
- Sort your portfolio by market band. Put each property in RealPage's published band: the 3% range (nine markets, led by San Francisco, Milwaukee and Phoenix), the 2%–2.9% middle, and the ~1% group. Set 2027 renewal targets per band, not one number for everyone.
- Check your supply pipeline. For each property, look up deliveries within three miles over the next four quarters. A forecast built on thin national supply says little if a 300-unit lease-up opens next door.
- Start trimming concessions where occupancy is above 95%. Test a smaller offer on a few units before you change the whole property.
- Model renewals at 2% and at 3%. Compare your budget at both ends, and check what happens to cash flow if payroll growth stalls and renewals slow.
- Review your 2027 budget assumptions. If your plan assumes flat rents, ask whether that is a deliberate choice or a leftover from this year's softness.
- Document your pricing method. If you use rent-setting software, keep records of how recommendations are generated and who approves them. Rules on rent-setting software vary by jurisdiction and are subject to ongoing litigation and legislation, so confirm current requirements with local counsel.
What we're watching
- The next jobs report. Payroll growth has swung from -10,000 in July to +133,000 in August to 29,000 in September. A weak trend would put the forecast at risk.
- Whether completions keep falling. The 13,000-unit gap is narrow, but the forecast still expects roughly 320,000 deliveries.
- The Federal Reserve. RealPage notes the FOMC raised the federal funds rate to 3.75%–4% in September and that its median projection points to a rate near 4.1% by year-end. Higher rates keep financing costs high and could slow new starts.
- Redfin's next sales data, to see whether more would-be buyers remain renters.
This is general information, not legal or financial advice. Rents and rules vary by market and jurisdiction.