Chattanooga Q2 2026 Market Report

Key Takeaways

• Demand continues to outpace new supply convincingly, with trailing 12-month absorption of 1,236 units exceeding the 377 deliveries during this period, a three-to-one ratio supporting both occupancy stabilization and early rent recovery.
• The construction pipeline has expanded to 1,557 units (5.0% of inventory), with trailing 12-month starts at 969 units, an uptick in development activity that will test absorption capacity through 2026.
• Rents turned positive at 1.7% quarter-over-quarter growth, the first gain in a year, while occupancy rose 30 basis points sequentially to 92.2%, both signals that the market has reached an inflection point as the supply-demand dynamics improve.

Market Outlook

Chattanooga is transitioning from a period of supply-driven pressure into one of cautious recovery, and the market’s underlying appeal supports that shift…