Phoenix Multifamily Shows Early Signs of Recovery in Q1 2026

The Phoenix multifamily market is showing early signs of stabilization following a period of elevated supply and softening rents.

In the first quarter, net absorption totaled 6,261 units—the strongest quarterly demand in more than two decades. At the same time, new deliveries declined to 3,854 units, representing a 20% decrease from the prior quarter and the lowest level in over four years. This imbalance between demand and supply contributed to a 70 basis point decline in vacancy, bringing the overall rate to 12.1%.

Average asking rents increased modestly by 0.4% quarter-over-quarter to $1,588 per unit, though rents remain approximately 3.0% below year-ago levels. Concessions remain elevated, reflecting continued competition among operators, but are supporting leasing activity across the market.

From a macroeconomic standpoint, Phoenix continues to outperform national benchmarks, with 3.2% GDP growth, 25,200 jobs added year-over-year, and an unemployment rate of 3.8%.

Conclusion
The data suggests the market is entering the early stages of recovery. Strong demand, combined with a slowing development pipeline, is expected to support improving fundamentals and future rent growth, while current pricing continues to present attractive acquisition opportunities.