A sharp contraction in new multifamily demand relative to new supply defined Q3 2025, with CBRE data showing only 11 U.S. markets where net absorption exceeded new construction—a collapse from 68 markets the prior quarter. The pendulum swung dramatically as new deliveries outpaced absorption nationwide, reversing a six-quarter trend and signaling a supply-demand reset that is already visible in market-by-market fundamentals.
Outliers Amid Supply Pressure
CBRE data on absorption versus completions highlights just how closely the few outperformers managed demand amid widespread oversupply. On a rolling four-quarter basis through Q3, New York led both completions and demand, with 36,300 new units delivered, and the market absorbed 54,900, pushing absorption to 2.2% of inventory versus 1.5% completions. Dallas saw 23,100 completions and 27,200 absorbed, a 4.3% to 3.6% spread. Phoenix also stood out with 21,400 units absorbed versus 16,800 delivered, translating to 5.2% against 4.1%.
Atlanta, Austin and Charlotte demonstrated the resilience typical of top Sun Belt markets, all posting solid absorption relative to supply. Atlanta absorbed 25,300 units in the past year, outpacing 16,300 completions for a notable 5% absorption rate, while Austin saw 18,600 units absorbed against 16,200 deliveries, a 6.2% absorption rate against 5.4% new supply. Charlotte’s absorption outstripped completions as well, with 15,900 units leased and 13,200 completed—7.8% versus 6.4%.
Other outperformers included Washington, D.C., Orlando and Tampa, each with absorption exceeding deliveries over the trailing four quarters. In Orlando, net absorption hit 14,100, well above the 11,700 units completed, for a 5.3% absorption rate. Tampa recorded 12,600 absorbed versus 8,800 completed, equating to a 4.3% rate against 3%.
Demand Weakness Sets a New Tone
However, those were outliers to a broader trend. The supply-demand imbalance became acute in the third quarter. Across the 69 U.S. metro markets tracked by CBRE, new supply overwhelmed net absorption nearly everywhere, with only 11 seeing positive outperformance. This is a dramatic departure from the prior quarter’s figures, reflecting a pullback in household formation and new leasing demand amid broader economic headwinds, including decelerating job growth and higher interest rates. According to CBRE’s accompanying data, 563,300 units remained under construction at the end of Q3. However, this represents a steady decline from the Q1 2024 peak—a potential harbinger of moderating supply in quarters ahead.
Absorption, Completions, and the Path Forward
The national total embodies the shift: While 544,700 units were absorbed across all tracked markets over the past four quarters, only 43,200 were absorbed in Q3 2025, against 91,900 new units delivered. The divergence is particularly stark compared with pre-pandemic patterns and has begun exerting upward pressure on vacancies, which are now 4.4% nationally.
Throughout this turn in the cycle, the spread between markets where demand outpaces new product and those now facing oversupply will define both rent growth and investment performance. For investors focused on markets that continue to lease new product at a robust pace—such as New York, Dallas, Phoenix, Atlanta, Austin and Charlotte—CBRE’s latest figures point to relative resilience, even as the majority of metros navigate new challenges from a surge in completions and softer overall demand.
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