In its latest report on the Phoenix Multifamily market, Kidder Mathews details “improving fundamentals” for the area as vacancies drop, demand increases and absorption outpaces deliveries.
For the moment, developers are continuing to hold a slow pace on new construction.
Kidder Mathews reports Q2 2026 vacancies at 11.3%, down 40 basis points from both Q1 2026 and Q2 2025. “The decline reflects renter demand absorbing new supply as construction activity slows,” the report says.
Average monthly rent was down 2.17% year-over-year, settling at $1,536/unit. Prices ranged from $1,145 for studio units to $2,107 for three-bedroom apartments.
Year-to-date absorption totals 9,414 units, with 4,168 units absorbed in Q2.
Units under construction fell to 15,974, a YoY drop of 35.45%. Q2 2025 saw 24,746 units under construction, while Q1 2026 reported 17,485.
Deliveries were also down in Q2 2026, totaling 3,221 for the quarter and 6,355 units year-to-date. The same period in 2025 saw 6,719 units delivered.
Cap rates fell to 5.8% in Q2 2026, down from 6.6% for Q2 2025. The average price/unit was up by 3.64%, reaching $266,672. Investor sentiment, consequently, appears to be trending upward in spite of the compressing cap rate.
Kidder Mathews’ outlook on the Phoenix Multifamily market is generally positive. The market seems to be working through its recent uptick in supply. Rents are holding relatively stable, and investment metrics are trending upward. (Source: Kidder Mathews)