This week’s housing data tells a story of contradiction.
Home sales are falling. Vacancy rates are climbing. Landlords are offering concessions at levels we haven’t seen in years. But at the same time, mortgage applications are rising, affordability is improving for the seventh consecutive month, and institutional investors just moved $165.5 billion into multifamily properties in 2025 alone.
So what does any of this actually mean for you?
It depends entirely on where you sit in the market. And that’s precisely why understanding the numbers—not just the headlines—matters more than ever.
Let’s break down what happened this week and what it means for your next move.
The Rental Market: Your Negotiating Power Is Real … and it’s not going away
If you’re renting right now, this might be the strongest position you’ve held in years.
According to Zillow’s November 2025 Rent Report, nearly two in five rental listings (39.3%) now include some form of concession—first month free, waived application fees, reduced deposits, or straight-up rent reductions. That’s up from just 14.4% in 2019, and it represents the highest share Zillow has recorded since they began tracking this metric.
Translation: Landlords are competing for tenants. Not the other way around.
But here’s what makes this more than just a temporary market shift: CoStar Analytics released their updated multifamily forecast this week, and they’re projecting that vacancy rates will hold at 8.5% through the end of 2026, easing only slightly to 8.1% by the end of 2027.
That’s not a blip. That’s structural.
Why? Because the apartment construction boom of 2023-2024 flooded the market with new units faster than demand could absorb them. Developers added more than 700,000 apartments in 2024 alone—a 40-year high. And while new construction is finally slowing down (completions dropped about 20% in 2025 and are projected to decline another 27% in 2026), the excess inventory is still working its way through the system.
Add to that the fact that economists have downgraded employment growth expectations due to tariff policy uncertainty, slower labor force growth, and rising productivity that allows companies to expand output without adding workers, and you have a rental market where demand simply isn’t keeping pace with supply.
CoStar’s Director of Multifamily Analytics, Grant Montgomery, put it plainly: “The balance of risks remains tilted to the downside.”
What This Means for You:
If you’re renting, this is your moment to negotiate. And I don’t mean timidly asking if maybe they could consider waiving the pet deposit. I mean:
Compare multiple properties. Let landlords know you’re actively shopping and have options.
Ask for specific concessions. First month free. Two months free. Reduced rent for the first six months. Flexible lease terms that let you break early without penalty.
Negotiate renewals aggressively. If your lease is coming up, don’t accept the renewal offer at face value. Your landlord would rather keep you at a lower rate than gamble on finding a new tenant in this market.
Request lease flexibility. Month-to-month options, early termination clauses, or the ability to sublet give you optionality in an uncertain market.
The data is clear: You have leverage. Use it.
The Homebuying Market: Down Doesn’t Mean Bad News
The National Association of Realtors reported that existing home sales fell 8.4% in January 2026, with declines across all four U.S. regions.
On the surface, that sounds ominous. Headlines will tell you the market is “cooling” or “slowing” or “softening”—all coded language that implies you should probably wait.
But here’s what those headlines consistently miss: Sales volume is not the same thing as market conditions for buyers.
In fact, the sales decline is happening alongside the best affordability conditions buyers have seen in nearly three years. According to Zillow’s January 2026 Market Report, the typical monthly mortgage payment is now 8.4% lower than it was a year ago. And affordability has improved for seven consecutive months—the longest sustained improvement since March 2022.
Let that sink in: Fewer people are buying homes at the exact same time that buying has become more affordable.
Why? Because most people are still waiting. Waiting for rates to drop to 4%. Waiting for prices to fall. Waiting for the “perfect” moment that feels safe and certain.
But here’s the truth about real estate markets: They don’t reward perfect timing. They reward informed action.
Fewer sales means fewer competing offers. It means sellers are more willing to negotiate on price, cover closing costs, or make repairs. It means you’re not getting into bidding wars or waiving inspections or writing desperate love letters to sellers.
The irony is that the market conditions everyone was begging for in 2021 and 2022—when homes sold in 48 hours with 15 offers over asking—are here now. And people are still sitting on the sidelines.
What This Means for You:
If you’ve been renting while waiting for the “right time” to buy, this is it. Not because the market is perfect—it’s not. But because the conditions that make homebuying accessible are finally aligned:
Affordability is improving. Monthly payments are down year-over-year.
Competition is lower. Fewer buyers means more negotiating power.
Rates are at a three-year low. More on this below, but 6.09% is the window you’ve been waiting for.
You don’t need the market to be perfect. You need it to be better—and it is.
The Investment Market: Know Your Numbers Before You Move
If you’re thinking about real estate investing—or you’re already an investor evaluating your next acquisition—this week’s data requires a clear-eyed assessment.
CoStar Analytics raised their near-term rent growth expectations (Q1 2026 is now projected at +0.2%, up 60 basis points from their previous forecast), reflecting firmer leasing trends and improved demand relative to earlier assumptions.
But they also lowered their second-half outlook. The projected rent growth for Q4 2026 was revised down from +1.0% to +0.6%. Why? Because absorbing the excess supply built up over the past two years is taking longer than expected, and employment growth—the primary driver of rental demand—is projected to come in softer than previously anticipated.
Grant Montgomery summed it up: “The revised forecast raises near-term rent growth expectations, reflecting firmer leasing trends. However, projections for the latter part of the year were lowered, as the process of absorbing excess supply is now expected to extend further into 2026.”
Beyond 2026, CoStar’s longer-term outlook is even more sobering. They’re forecasting that the U.S. multifamily vacancy rate will decline only modestly over the next five years, with rent growth averaging just 1.5% annually through 2030—well below historical norms. The culprits? Lower immigration constraining labor force growth, slower household formation, and productivity gains allowing economic expansion without proportional employment growth.
But here’s the thing: Institutional investors aren’t sitting out. According to MSCI Real Capital Analytics, apartment investment volume during 2025 totaled $165.5 billion—the second consecutive year of expansion, outpacing 2024 by 9.4%. Cap rates for apartment transactions averaged 5.7%, unchanged from 2024 and the tightest among all major property types.
So what do they see that makes them willing to deploy billions into a market with tepid rent growth projections?
They’re looking beyond current headwinds to future income growth. They’re buying properties at discounted valuations (prices fell 1.3% in 2025, but the rate of decline has moderated significantly from prior years). And they’re underwriting conservatively with long time horizons.
What This Means for You:
If you’re investing—or thinking about it—this is not a market where you can rely on aggressive rent growth or rapid appreciation to paper over mistakes in underwriting.
This is a market where you need to:
Underwrite conservatively. Don’t assume 3-5% annual rent growth. Model closer to 1-2% and make sure your deal still works.
Focus on cash flow, not appreciation. If you’re counting on property values increasing 20% in three years, you’re gambling, not investing.
Know your local market. National vacancy at 8.5% is meaningless if your submarket is at 12% or 5%. Dig into the specifics.
Be prepared to wait. Rent growth and vacancy normalization are coming, but they’re coming slowly. If you need quick returns, this isn’t your market.
And if you’re new to real estate investing? Don’t use this market to learn by doing. Get educated first. Markets like this separate disciplined investors from gamblers.
Mortgage Rates: The Window You’ve Been Waiting For
Let’s talk about the elephant in the room: mortgage rates.
As of February 12, 2026, the 30-year fixed mortgage rate dropped to 6.09%—down from 6.11% the previous week and 6.87% a year ago, according to Freddie Mac’s Primary Mortgage Market Survey. That’s a three-year low.
And it’s not just the rate itself—it’s what’s happening in response. Freddie Mac reported that “purchase application activity is higher than a year ago,” meaning people are actually moving on these rates.
But here’s the conversation I keep having with readers who email me: “Should I wait for rates to drop to 4%?”
Short answer: No.
Longer answer: The 3-4% mortgage rate environment of 2020-2021 was an anomaly. It was the result of emergency monetary policy in response to a global pandemic—rates driven artificially low to prevent economic collapse. That policy has ended. The Federal Reserve has been clear that they’re not going back to near-zero rates absent another catastrophic event.
The historical average for 30-year fixed mortgage rates over the past 50 years is around 7-8%. The rate you’re seeing now—6.09%—is historically reasonable. It’s not “high.” It’s normal.
And every month you wait costs you in ways that compound:
You’re paying rent instead of building equity. Every dollar you pay to a landlord is gone. Every dollar you pay toward a mortgage builds ownership.
Home prices don’t freeze while you wait. Even in “cooling” markets, prices stabilize and edge up in strong submarkets. Waiting for rates to drop another percentage point while prices rise 5% is a net loss.
Life doesn’t wait. If you’re delaying buying because you’re waiting for the “perfect” market, you’re also delaying stability, control over your living situation, and the wealth-building that homeownership provides.
What This Means for You:
If you can afford the monthly payment at 6.09%, buy now. Not because the market is perfect, but because:
This is as good as rates are likely to get in the near term
Affordability is the best it’s been in three years
Competition is lower than it’s been since 2019
You can always refinance later if rates do drop (but don’t count on it)
Stop waiting for permission. The market is telling you it’s time to move.
The Strategic Takeaway: Opportunity Lives in Complexity
Here’s what I want you to understand about this week’s data: Markets that feel complicated, uncertain, or “not quite right” are exactly where opportunities exist.
When everything is obvious—when rates are at 3%, prices are soaring, and everyone is buying—that’s when you overpay and compete with 10 other offers. When the market feels messy and uncertain, that’s when most people freeze. And that’s when the informed move.
Right now:
Renters have negotiating power they haven’t had in years, and it’s not going away anytime soon.
Buyers have affordability and low competition, but most are still waiting for mythical “perfect” conditions.
Investors need to underwrite conservatively, but institutional capital is still flowing into apartments because long-term fundamentals remain strong.
Mortgage rates are at a three-year low, but people are still holding out for 4%.
The market isn’t going to hand you perfect conditions. It’s handing you opportunity disguised as complexity.
The question is: Are you positioned to see it?
Sources:
Zillow November 2025 Rent Report
National Association of Realtors, January 2026 Existing Home Sales Report
CoStar Analytics, February 2026 Multifamily Forecast
Freddie Mac Primary Mortgage Market Survey, February 12, 2026
MSCI Real Capital Analytics via Multifamily Dive, January 2026
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Eve Moss
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Disclaimer: Bidding strategies, offer structures, and contract terms vary by state, local custom, and market conditions. What works in a buyer’s market differs from a seller’s market. Mortgage products, down payment requirements, and lending standards change. The strategies described worked in one specific situation but may not be effective or appropriate in your market. Always work with licensed real estate agents, mortgage professionals, and attorneys familiar with your local market and laws.
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