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October 26, 2026
Partner, Chief Economist
Every housing market has a long-term average for how much new rental housing gets built each year, measured as a percentage of its existing stock. For example, a metro might typically add about 2% to its apartment inventory annually. During the construction boom, many markets ran well above their own average, creating the “supply wave” that held down rents.
The equilibrium date is the point where a market’s new supply rate falls back to its own long-term average. Before that date, supply is above normal and can hold down rents. After it, supply is at or below normal, so that puts upward pressure on rents.
The chart below shows that only Tampa, Philadelphia and Austin are still forecasted to have above-average rental supply. With new buildings taking 12-18 months to lease up, the fading supply wave is set to put upward pressure on rents and, by extension, on shelter inflation into 2027. This complicates the Fed’s task, with inflation already running above its 2% target.
For more discussion, see our Daily Spark on the higher rates, higher rent doom loop.
Note: Current supply considers the trailing 12 months of completions. Sources: JLL Research (Tyler Sullivan and Daniel Littman), RealPage, Apollo Chief Economist
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