2027 is shaping up as the year the apartment supply wave finally recedes, while borrowing costs stay the main obstacle. For value-add buyers with patient capital, that combination points to the best entry window since 2021.

The supply wave ends in 2027

New apartment completions are on track to hit their low point in 2027. Yardi Matrix projects about 444,000 units nationally next year, the bottom of the cycle, with only modest growth after that.

The pipeline in our markets confirms it:

  • Dallas–Fort Worth: 29,700 units under construction, about half the 2023 peak of more than 60,000 and down 29% from a year ago.

  • Orlando: third-quarter completions fell 49% from a year earlier, and annual deliveries are well off their 2024 peak of about 15,000 units.

Few new projects are breaking ground, because higher construction and financing costs make most new development hard to justify. That means the buildings delivering in 2028 and 2029 are largely already accounted for.

Renters are absorbing the overhang

Demand has held up better than most forecasts expected. National apartment vacancy fell to 7.8% in the third quarter, the lowest since late 2023, and Apartments.com expects it to reach 7.5% by the end of 2027. Its year-end 2027 rent growth forecast rose to 2.6%, up from 1.9%.

Dallas–Fort Worth is turning first. Through the third quarter, renters absorbed more than 26,700 units, already more than in all of 2024 or 2025 and about 5,600 more than were completed. Vacancy has declined two quarters in a row to 9.4%, and the annual rent decline has narrowed to 2.0% from 4.3% at the start of the year.

Florida is a step behind. Orlando vacancy is 5.3% and rents are flat year over year. Tampa and Jacksonville are still working through the heaviest new supply in the Southeast: Tampa vacancy is near 8.8%, and asking rents there are down 2.7% from a year ago. As deliveries slow in 2027, we expect these markets to follow the path Dallas is on now.

The gap is still visible in concessions, which rose to 4.2% nationally as newly built properties compete for tenants. That pressure falls hardest on new Class A buildings, not on the older B and C communities where we invest.

Rates will not bail anyone out

A year ago, many investors expected the Federal Reserve to keep cutting. That did not happen. With inflation still above target and oil above $100 a barrel, the Fed raised rates in September and held its target range at 3.75% to 4.00% at its October 28 meeting. Markets are now debating whether another increase comes in December. The 10-year Treasury, which drives most apartment loan pricing, has traded around 5%.

Our base case for 2027 is that borrowing costs stay roughly where they are. Our underwriting does not assume that a refinance at lower rates will rescue the numbers. We underwrite acquisitions at today’s cost of debt, with conservative leverage and reserves sized for a longer hold if needed.

Where the opportunity is

Higher rates have already reset prices. Apartment cap rates averaged 5.79% in the second quarter of 2026, the highest level since 2015, and Trepp estimates multifamily values are down about 18% from their June 2022 peak.

The pressure is concentrated among owners who bought in 2021 and 2022 with short-term, floating-rate debt. Those loans are now maturing, and multifamily makes up more than half of the severely troubled commercial mortgage-backed securities balance. Many of these owners cannot refinance without adding significant new equity, which means more properties are coming to market from motivated sellers.

That combination is rare: prices well below peak, motivated sellers, and new supply about to fall sharply. Buyers who acquire in 2027 at today's basis may be well positioned when rent growth returns as the supply pipeline empties.

How CRP is positioning for 2027

We have been through several cycles since 1994, and our approach for 2027 follows what has worked:

  • Buy below replacement cost. We focus on well-located Class B and C communities in Texas and Florida that can be bought for far less than it would cost to build them today.

  • Underwrite at today's rates. Our underwriting does not assume falling rates or rapid rent growth.

  • Add value through operations. Targeted renovations and better management drive income, rather than market appreciation alone.

  • Respect Florida's cost structure. Insurance in Florida runs more than double the national average, so we underwrite it carefully and stress-test it.

  • Stay aligned with our investors. The sponsors of each investment co-invest alongside investors and sign the lender’s non-recourse guarantees.

We expect 2027 to be one of the better buying windows of this cycle, and we intend to be disciplined about which deals we pursue. To hear about new offerings as they become available, create an account on our investor portal.

Sources

  • Multifamily Dive, apartment supply outlook (August 25, 2026) and multifamily values (October 14, 2026)

  • Apartments.com / CoStar, Q3 2026 national apartment forecast (via CRE Daily, November 3, 2026)

  • Federal Reserve, FOMC statement (October 28, 2026)

  • Cushman & Wakefield, Dallas–Fort Worth Multifamily MarketBeat, Q3 2026

  • Matthews Real Estate Investment Services, Orlando multifamily market report, Q3 2026

  • Cornovus, Southeast multifamily report, 2026

  • CRE Daily, apartment cap rates, Q2 2026

  • Trepp, CMBS and commercial property value data, 2026

This article is for informational purposes only and reflects our views as of November 2026. It is not investment advice and is not an offer to sell or a solicitation of an offer to buy any security. Offerings are made only to accredited investors through official offering documents. Forecasts are inherently uncertain, and past performance is not indicative of future results.

This article is for informational purposes only and is not an offer to sell or a solicitation of an offer to buy any security. Past performance is not indicative of future results.