Will Rents Go Up or Down in 2026?
National rents will rise 3.5-4.0% in 2026, according to forecasts from the National Apartment Association and Freddie Mac. But the national number masks a sharp regional divide. The Bureau of Labor Statistics reports that rent growth in the Midwest outpaced the Sun Belt by 2.3 percentage points over the past 12 months — and that divergence is widening.
Three forces drive the 2026 forecast:
- Oversupply in Sun Belt markets. Austin, Phoenix, and Nashville delivered a combined 40,000+ new apartment units in 2025. Absorption is running 18-24 months behind schedule, per RealPage data.
- Affordability migration. The US Census Bureau reports that 1.2 million people moved from coastal and Sun Belt cities to lower-cost Midwest markets in 2025 — the third consecutive year of net migration gains for the region.
- Interest rates. The Federal Reserve held rates at 4.25-4.50% through Q1 2026. High mortgage costs keep potential buyers renting, sustaining rental demand even as purchase markets soften.
Regarding the 2026 rental outlook, investors should focus on markets where rent growth exceeds expense growth — a threshold the Midwest currently clears and the Sun Belt does not.
What Is the Rental Vacancy Rate in the US?
The US Census Bureau reports the national rental vacancy rate at 6.6% as of Q1 2026, up from the 2022 cycle low of 5.8%. The increase is driven almost entirely by Sun Belt multifamily overbuilding. Midwest vacancy rates remain tight at 4-5%.
| Region | Vacancy Rate | Trend | Key Driver |
|---|---|---|---|
| Midwest (Cleveland, Indianapolis) | 4.5% | Stable | Modest new supply, steady demand |
| Sun Belt (Austin, Phoenix, Nashville) | 8.9% | Rising | Record multifamily deliveries |
| Northeast (New York, Boston) | 4.2% | Falling | Limited new construction |
| West Coast (LA, Seattle) | 5.8% | Stable | Permitting constraints |
| Southeast (Atlanta, Charlotte) | 7.1% | Rising | New supply outpacing absorption |
Table: US rental vacancy rates by region, Q1 2026 (Source: US Census Bureau)
Regarding vacancy trends, the Midwest offers the tightest conditions for landlords — fewer empty units mean faster lease-up and stronger negotiating leverage on rent.
Which US Cities Will See the Highest Rent Growth?
Midwest and Rust Belt cities lead US rent growth projections for 2026, according to data from the NAA, BLS, and RealPage:
| City | Projected Rent Growth | Current Vacancy | Net Yield |
|---|---|---|---|
| Cleveland, OH | +5.8% | 4.8% | 7.2% |
| Indianapolis, IN | +5.5% | 4.5% | 6.8% |
| Birmingham, AL | +5.2% | 5.3% | 6.5% |
| Cincinnati, OH | +5.0% | 4.7% | 6.4% |
| Kansas City, MO | +4.8% | 5.0% | 6.2% |
| Columbus, OH | +4.5% | 5.2% | 5.8% |
Table: Top US cities for projected rent growth, 2026 (Sources: NAA, BLS, RealPage)
These cities share three characteristics: property prices below $200,000, new construction below 3% of existing inventory, and population growth driven by affordability migration rather than speculative investment.
See our complete rental yield rankings by city for data on 25+ US markets. For the broader yield trend, read about the rental yield reversal and what happens to rental investors when rates drop.
About the Author: Nick Thorp is the founder of PIE (Property Intelligence Engine) and Property Aura, with 10 years of experience in property investment research and data analysis. Try PIE free.