In addition to the continuation of subdued occupancy and rent growth, the recent rebound in interest rates and inflationary pressures has constrained construction activity further. As those constraints have persisted, the national construction pipeline has contracted by nearly 50%, falling from a peak of roughly 1.18 million units under construction in Q1 2023 to approximately 562,000 units midway through the second quarter of 2026. Trailing twelve-month deliveries have moderated to roughly 475,000 units through Q2 2026, down from approximately 498,000 units a quarter earlier, and CoStar projects further deceleration through the back half of the year as the pipeline continues to thin.

Within this national backdrop, the slowdown remains uneven by market. Pipeline concentration is heaviest in a small group of secondary Sun Belt and southeast metros. Miami remains a hotspot with a construction pipeline equal to 6.4% of its base inventory—the highest level among the 50 largest markets in the country—followed by Nashville (6.0%), Charlotte (5.8%), Tampa (5.3%), and Raleigh (5.0%). Northeast gateway markets have moved up the relative leaderboard as well, with Boston (4.5%), Northern New Jersey (4.4%), and Lakewood-New Brunswick (4.1%) running pipelines that meaningfully exceed their historical pace. At the opposite end, several markets have effectively worked through their peak supply: Sacramento, Memphis, East Bay, Oklahoma City, and Detroit all have pipeline shares below 1% of inventory, and trailing twelve-month deliveries in those metros have already normalized. The largest Sun Belt supply leaders of prior cycles, including Austin, Phoenix, and Dallas-Fort Worth, continue to log meaningfully lower trailing deliveries versus their 2024 peaks even as their absolute pipelines remain among the nation’s largest.

Looking through the back half of 2026, CoStar projections point to a sharper step-down in deliveries. Trailing twelve-month net deliveries are forecast to decline from roughly 475,000 units to approximately 401,000 units by Q3 2026 and roughly 389,000 units by year-end, a cumulative pullback of about 22% versus the Q1 2026 pace. Trailing twelve-month starts have also continued to compress, falling to roughly 307,000 units, well below the rate needed to replenish the existing pipeline. With completions slowing, starts running below historical norms, and demand holding firm, the supply backdrop is moving decisively in favor of operators heading into 2027, particularly in Sun Belt markets that absorbed the bulk of the prior cycle’s deliveries.