The units are getting built, finished and handed over. They’re just sitting.
Census Bureau data from the Survey of Market Absorption of New Multifamily Units, covering apartments completed in the first quarter of 2026, shows a three-month absorption rate of 41 percent. That’s down five points from the prior quarter, the seventh consecutive quarter below 50 percent, and the lowest reading since the fourth quarter of 2023. Completions themselves fell to 73,510 units from 77,980. NAHB published its analysis of the release on August 28.
Velocity, not price
Median asking rent on apartments completed in Q1 2026 hit $2,034, up 6.5 percent from $1,909 a year earlier. Read those two numbers together and the picture is specific: developers are not cutting rents to move product, and the product is still not moving. That’s a lease-up duration problem, which lands on the debt before it lands on the builder. Extended carry on a construction loan through a longer stabilisation period is exactly the input that reprices the deals that would otherwise have started in 2027.
The 12-month number is the one to watch
Slow lease-up looks survivable if it catches up. It isn’t catching up. The absorption rate at 12 months, for apartments completed a year ago, is 89 percent. That’s the second lowest reading in the entire SOMA series, beaten only by the 86 percent recorded for units completed in the first quarter of 2020. The intermediate steps tell the same story: 69 percent at six months on 77,980 units, 81 percent at nine months on 97,670. A full year past certificate of occupancy, better than one unit in ten is still empty.
Condominiums went the other way. Three-month absorption for condo and co-op units rose to 70 percent, on 3,879 units completed in the quarter, which is a small enough base to move sharply but does suggest for-sale product is clearing faster than rental right now.
What it means for the conversion pipeline
Slow absorption on new-build rental doesn’t hit every product the same way. Bushburg’s 713-unit Pearl & Pine conversion at 80 Pine Street is competing on ten floors of amenity in a Financial District with limited comparable stock, and a quarter of its units are rent-restricted under New York’s 467-m programme, which changes the lease-up curve entirely. The Prime Group’s 208 South LaSalle conversion in Chicago carries 51 affordable units out of 168 and $26 million in tax increment financing, and its scope shrank from 280 units and $140 million to 168 and $100 million between approval and permit. Subsidised and constrained-supply product is not exposed to the same velocity risk as an unrestricted suburban lease-up, and the SOMA average hides both.
The figures above are Census tables as reported by NAHB. Census did not publish an exact release date we could confirm; the data landed in the last week of August. NAHB’s analysis is at Eye on Housing, and the survey itself is at census.gov.