Quick Take: The oversupply narrative is built on data that is already two years old. Multifamily starts have fallen nearly 53% from their 2022 peak, structural demand from high-income migration is accelerating, and Multilytics® is projecting above-consensus rent growth across all 16 of Origin’s Sun Belt target markets. The investors asking whether there are too many apartments are looking at where the market has been — not where it is going.
We hear it often from investors: “Aren’t there too many apartments being built? Won’t rents fall?” It’s a fair question. The past few years delivered a historic wave of new multifamily supply — nearly 600,000 units completed in 2024 alone. In markets like Austin, Phoenix, and Nashville, that supply pressure was real and rent growth softened accordingly.
What that narrative doesn’t account for is where the market is headed next.
The Supply Picture Has Changed
Multifamily starts have fallen 52.8% from their Q3 2022 peak, with annual starts totaling just 276,238 as of Q1 2026 — up 7.5% year over year but still 11% below levels from two years ago. Quarterly deliveries are now down 53.1% from their Q3 2024 peak, and annual inventory growth has decelerated to 1.8%, its lowest level in 10 quarters.1 CBRE data confirms that by mid-2025, multifamily construction starts had fallen 74% below their 2021 peak and 30% below their pre-pandemic average.2 Marcus & Millichap projects just 270,000 units will deliver in 2026 — the lowest annual total since 2014, with supply and demand forecasts across all 50 major markets pointing in the same direction.3 The pipeline that caused near-term softness is being absorbed, and relatively little is behind it.
The reason is straightforward. Higher interest rates, rising construction costs, and tighter lending standards made new projects difficult to underwrite profitably for the past two-plus years. Developers pulled back. And once you lose two or three years of starts, there is no fast-forward button. According to the National Multifamily Housing Council’s Quarterly Survey of Apartment Construction & Development Activity, 84% of builders reported construction delays at the peak of the cycle (December 2023), with permitting requirements and financing availability cited as primary causes — a figure that has since moderated but remains elevated, rising back to 78% as of December 2024.4 Supply that was expected to clear by 2024 continued arriving well into 2025, extending the period of softness longer than most models projected.
When you start a multifamily development today, you are building for a market in 2028 — one that is shaping up to have meaningfully tighter supply conditions than we have seen in a decade.
The Demand Side Is Where the Real Story Is
While much of the industry conversation has focused on supply, a structural shift is underway on the demand side that deserves equal attention. It has three distinct components: who is moving, where they are going, and how long they are staying.
Migration: A Structural Realignment of Wealth
Americans are relocating in large numbers, and the IRS data tells the story clearly. As Visual Capitalist’s analysis of IRS interstate income flow data illustrates, Florida gained $21 billion in adjusted gross income from interstate moves in 2023 alone — more than the next five states combined. Texas added $6 billion. Tennessee, North Carolina, and Arizona each added billions more. California lost $12 billion and New York lost nearly $10 billion — a combined $22 billion in taxable income that relocated primarily to Sun Belt states.5
High-income filers — those earning $200,000 or more — accounted for roughly 82% of Florida’s net gain.5 These are households that can afford to live anywhere. Sun Belt and Mountain metros remain among the nation’s leading relocation destinations, according to Marcus & Millichap’s 2026 National Multifamily Investment Forecast.3
Renter Profile: Higher Income, Longer Duration
Higher-income households moving to a new city typically rent first — often for a year or more — while they establish themselves, sell a prior home, or take advantage of the flexibility that renting provides. As of Q1 2026, the spread between renting and homeownership had widened to $1,040 per month — 2.4 times the long-term average — making renting significantly more cost-effective than owning.1 Even financially capable households are choosing to remain renters longer than at any prior point in recent memory.
Multilytics® confirms this at the market level. Across Origin’s 16 target markets, the renter profile skews toward higher-income, professionally employed households — the segment least sensitive to economic disruption and most capable of absorbing rent growth. Class A properties, where Origin concentrates its portfolio, are more insulated from economic headwinds precisely because barriers to homeownership keep higher-earning households in the renter pool longer.6
Retention: Renters Are Staying Put
Demand is not just about new renters entering the market. It is also about existing renters staying. Renewal conversion rates have climbed as households historically become less likely to move during periods of economic uncertainty. Trailing 12-month absorption has run roughly 40% above its long-term average, even as cumulative deliveries from the oversized 2023-24 cohort have modestly outpaced that absorption on the same trailing basis — a supply overhang still working through the pipeline, not a demand problem. Notably, the most recent quarter’s absorption outpaced new deliveries, an early signal that the balance is turning.⁷ For stabilized assets in well-located Sun Belt submarkets, this combination — durable trailing demand and a rapidly narrowing forward supply pipeline — translates into lower turnover costs, more predictable cash flow, and a more durable income stream than a single quarter’s supply/demand print would suggest.
Jobs: The Foundation Underneath It All
Migration follows employment, and Sun Belt job creation continues to outpace the national average. The corporate relocation trend that accelerated during the pandemic has not reversed — it has matured. Major employers have established permanent footprints in Dallas, Nashville, Phoenix, Charlotte, and Tampa, creating a self-reinforcing cycle: jobs attract workers, workers need housing, housing demand supports rents. Q1 2026 national multifamily absorption rebounded to 93,277 units following a soft second half of 2025. On a trailing 12-month basis, absorption of 303,377 units still runs 40.2% above the long-term average, reflecting the cumulative effect of these demand drivers even as quarterly readings normalize.
What Our Data Is Telling Us
We built Multilytics®, our proprietary suite of machine-learning models, to provide a more precise read on where rents are headed — at the submarket and property level, not just the city level. The platform processes over 4 billion data points monthly, analyzing supply and demand dynamics across more than 11 million multifamily units in 100-meter grid squares across our target markets.6
In December 2022, when virtually every major forecaster projected continued positive rent growth, Multilytics® projected that Class A multifamily rents would go negative in 2023. We published that forecast. It proved correct — 10 of our 15 target markets came within 2% of our point estimates, and the remaining five landed within 0.8% on an annualized basis. Our 2024 accuracy report showed 96% accuracy for our target markets and 99% accuracy at the national level during the first half of 2024.6 Multilytics® accuracy figures are based on internal analysis; methodology and supporting data are available upon request. Note: the 2023 accuracy analysis reflects fifteen target markets prior to Origin’s expansion of its target market universe to sixteen; this does not affect the historical figures cited.
We have also been straightforward about where Multilytics® was less precise — the pace of recovery in Austin and Denver was slower than we projected, because construction delays pushed supply well into 2025, a dynamic we have since addressed.
Multilytics® is now projecting a meaningfully different environment ahead. Across Origin’s 16 Sun Belt target markets, five-year rent growth projections exceed the national average in every single market.6
Orlando and Tampa lead at approximately 5.5% five-year compound annual growth rate (CAGR). Even Austin — the market that absorbed the most supply pressure — projects above 4%. At the deal level, a Dallas-area property projects 4.1% growth in 2025 and 7.8% in 2026, with a five-year CAGR of 5.0%. A Phoenix-area property projects 7.2% in 2025 and 9.3% in 2026.6 These deal-level figures are illustrative of specific assets in Origin’s portfolio and are not representative of all portfolio holdings or of expected returns across the fund. For context, the historical national average for multifamily rent growth is approximately 3% annually — a benchmark Multilytics® projects Origin’s target markets to exceed across the board, and above CBRE’s consensus forecast range of 2.8% to 3.1%.2,6
What This Means for Investors
History suggests that the strongest vintage years for multifamily investment tend to be the ones when new development activity is most constrained. Investors who committed capital in the years following 2009 were positioning for a market that looked very different two to three years later. The current backdrop shares several of those characteristics: a constrained supply pipeline, durable structural demand, and a financing environment that favors operators with established platforms and access to capital.
The IncomePlus Fund was designed for this kind of environment — open-end, income-oriented, and concentrated in the Sun Belt markets where this thesis is taking shape. During the 2023–2024 period of elevated supply and softening rents, the fund demonstrated low downside capture while participating in performance improvement as conditions recovered (figures presented net of fees; full performance history, including since-inception and standard period returns, is available upon request).1 With supply tightening and above-consensus rent growth projected across all 16 of our target markets, we believe the fund is well-positioned to participate in the recovery ahead. As with all investments, actual results may differ materially from projections, and investors may lose capital.
Origin’s Co-CEOs have invested more than $94 million of their own capital alongside investors in our funds since Origin’s founding in 2007 — representing personal capital committed across Origin’s fund vehicles, including the IncomePlus Fund — because they are committed to the same thesis we are asking others to consider.8
Multilytics® is telling us where rents are likely headed based on current data and modeling. The IncomePlus Fund is how we are positioned to seek to benefit from those conditions. If you would like to see how Multilytics® is informing our current deal pipeline, we are happy to walk you through it.
The oversupply objection reflects where the market has been. We are focused on where it is going.
FAQ
Is multifamily oversupply still a concern in 2026?
Multifamily starts have fallen nearly 53% from their Q3 2022 peak, and Marcus & Millichap projects just 270,000 units will deliver in 2026 — the lowest annual total since 2014. The supply wave that softened rents in 2023 and 2024 is being absorbed, with relatively little new supply behind it.
Why are high-income renters staying in apartments longer?
The cost gap between renting and homeownership widened to $1,040 per month as of Q1 2026, which is 2.4 times the long-term average, making renting significantly more cost-effective than owning. Even financially capable households are choosing to remain renters longer than at any prior point in recent memory.
Which Sun Belt markets are projected to see the strongest rent growth?
Multilytics® projects five-year rent growth above the national average across all 16 of Origin’s Sun Belt target markets, with Orlando and Tampa leading at approximately 5.5% five-year CAGR. These projections are forward-looking estimates subject to material uncertainty, and actual results may differ significantly.
Sources
1. Newmark Research. United States Multifamily Capital Markets Report, Q1 2026. Newmark Group, Inc. Cited for: 52.8% decline in multifamily starts since Q3 2022 peak; quarterly deliveries down 53% from the Q3 2024 peak, with annual inventory growth at a 10-quarter low of 1.8%; rent-vs.-buy spread of $1,040/month as of Q1 2026 (2.4x long-term average); Q1 2026 national absorption of 93,277 units, a rebound from the prior quarter, with trailing 12-month absorption of 303,377 units still 40.2% above the long-term average; annual supply exceeding annual demand for a second consecutive quarter, by more than 63,000 units on a trailing 12-month basis.
2. CBRE Research. U.S. Real Estate Market Outlook 2025 — Multifamily. Published December 2024. CBRE Group, Inc. Also cited: 2025 U.S. Real Estate Market Outlook Midyear Review, published mid-2025 (cbre.com/insights/reports/2025-us-real-estate-market-outlook-midyear-review). Cited for: multifamily construction starts 74% below 2021 peak and 30% below pre-pandemic average by mid-2025; 5-year rent growth forecast of 3.1% (January 2025 outlook), revised to 2.8% at midyear; pre-pandemic 5-year average of 2.7% annual rent growth.
3. Marcus & Millichap. 2026 National Multifamily Investment Forecast. Published late 2025/early 2026. Marcus & Millichap, Inc. Cited for: ~270,000 units projected for 2026 delivery (lowest annual total since 2014); supply and demand forecasts across 50 major markets; Sun Belt and Mountain metros as leading relocation destinations.
4. National Multifamily Housing Council (NMHC). Quarterly Survey of Apartment Construction & Development Activity. NMHC. Cited for: 84% of respondents reporting construction delays in the December 2023 survey wave (peak figure); permitting requirements (81% of those experiencing delays) and availability of financing (79%) cited as primary causes. Subsequent quarters showed moderation: 81% (March 2024), 70% (June 2024), 52% (September 2024), rising to 78% (December 2024).
5. Visual Capitalist / Internal Revenue Service. “Mapped: Net Interstate Income Flows by State (2023).” Visual Capitalist. Based on IRS Statistics of Income data and Realtor.com analysis. Licensed via licensing.visualcapitalist.com. Cited for: Florida +$21B AGI; Texas +$6B; California −$12B; New York −$10B; high-income filers (≥$200K) comprising ~82% of Florida’s net gain.
6. Origin Investments, Multilytics® Platform. Proprietary machine-learning rent forecasting system. Origin Investments, 2025. Cited for: 4B+ data points processed monthly; 11M+ multifamily units analyzed in 100-meter grid squares; 16-market five-year rent growth projections (all above national average); 2023 forecast accuracy (10 of 15 markets within 2%; remaining 5 within 0.8% annualized) — note: 2023 analysis reflects 15 target markets prior to expansion of universe to 16; 2024 accuracy report (96% target market accuracy, 99% national accuracy H1 2024); deal-level projections for Dallas-area (4.1% / 7.8% / 5.0% CAGR) and Phoenix-area (7.2% / 9.3%) assets — illustrative of specific holdings, not representative of all portfolio assets or expected fund returns; platform methodology upgrades (satellite monitoring, parcel-level data, probabilistic delivery windows). Multilytics® accuracy figures are based on internal analysis; methodology and supporting data are available upon request. All Multilytics® projections are forward-looking and subject to material uncertainty.
7. Newmark Research. 1Q26 U.S. Multifamily Capital Markets Conditions & Trends. Published May 14, 2026. Newmark Group, Inc. Cited for: Q1 2026 absorption of 93,277 units vs. 75,205 units delivered; trailing 12-month absorption of 303,377 units, approximately 40% above the long-term average; Q1 2026 deliveries 53.1% below the Q3 2024 peak; annual inventory growth at 1.8%, a 10-quarter low.
8. The Co-CEO capital commitment figure is as of the date of publication and reflects an aggregate amount of personal capital committed across Origin’s fund vehicles since its founding in 2007.
