Monthly multifamily market intelligence for local, state, national, and global context. Published by NVest Analytics. Every figure is sourced and dated.
September 2026
Los Angeles MSA. Multifamily
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The Month in Three Parts
How We Got Here
Los Angeles is the second-largest multifamily market by dollar volume: more than $9.3 billion traded over the trailing 12 months, up 35% [168], and $3.2 billion across 75 properties in 2025 on the Yardi Matrix list, ninth nationally [121].
Nationally, construction fell to 475,000 units, 3.5% of inventory and the lowest since 2013 [27][28].
Agency 5-year quotes ran 5.14 to 5.29% in March [40] before the 10-year Treasury climbed from 4.19% on Jan 2 to 4.78% on Sep 4 [1].
The Fed committee held rates at 3.50 to 3.75% on Jul 29, but three members voted to raise them [17][18].
The January 2025 wildfires, Measure ULA transfer taxes and city rent-stabilization rules shaped the last 18 months more than supply did.
Where We Are Now
Vacancy 4.52%, up 38 basis points year over year; effective rent $2,887, up 0.8% [168][169].
Demand is at a three-year high: 2,837 units of net absorption against 1,695 delivered in Q2 [168][170].
Pricing: average cap rate 5.37%, the sixth straight quarterly increase, at $308,551 per unit [168].
Inflation is still above target: CPI 3.4% in July, PCE 3.7% in July [36][216]. SOFR is 3.66% [35].
Pricing gap: 5.37% vs. agency 5-year debt at 6.07% [40], negative leverage of about 70 basis points, narrowing as cap rates rise.
Supply: 25,636 units under construction, down 15% from 30,285, as financing pushed developers to pull back [168]; 9,105 delivered over the trailing year, up 17.6%.
Where We're Headed
Rates: futures markets price about a 58% chance of a quarter-point increase on Sep 16, after peaking near 66% following the Jackson Hole speech [217]. If it lands, agency 5-year fixed rates extrapolate to roughly 6.2 to 6.3% [1][40].
Forecasts: vacancy to end 2026 at 4.4% and rents at $2,904, +1.7% [169].
California employment is forecast at 0.8% for 2026 after 0.1% in 2025, accelerating to 2.5% in 2027 [171]; LA County added 35,300 jobs (0.8%) over the year to June and about 3,700 a month in 2026 [172].
Insurance: the California FAIR Plan raised coverage limits to $3 million and extended eligibility to small rental buildings in 2026, with rates up about 29% [173].
Net: Los Angeles is a high-basis, low-vacancy market where cap rates are finally rising toward debt costs. The LA County roll grew 4.42% to $2.27 trillion; Prop 13 keeps most owners at a 2% reassessment cap [174].
What It Means for Los Angeles
The rate direction has flipped. Three Fed votes to raise rates and a 10-year Treasury at 4.78% mean the "wait for cuts" plan is over for 2026. Owners with loans maturing in 2026 or 2027 should model a refinance at 6.0 to 6.5% [1][17][18].
Cap rates are catching up to debt. Six straight quarterly increases to 5.37% [168]; the gap to 6.07% agency debt is now about 70 basis points and narrowing.
Demand is at a three-year high. 2,837 units absorbed in Q2 against 1,695 delivered [168][170], with vacancy forecast to tighten to 4.4% by year-end [169].
Deal volume is deep. $9.3 billion over the trailing year, up 35%, including $2.56 billion in Q2 [168].
Costs are regulatory, not tax. Prop 13 caps most reassessments at 2% [174]; the FAIR Plan rate increase of about 29% and Measure ULA are the line items to model [173].
Los Angeles Multifamily
Los Angeles is a low-vacancy, high-basis market where pricing is finally adjusting. Cap rates have risen six straight quarters to 5.37%, demand is at a three-year high, and vacancy of 4.52% is forecast to tighten to 4.4% by year-end. Rents grow slowly, about 1% a year, and the operating story is insurance and regulation rather than supply.
San Fernando Valley and Westside active for trades [176][178]
Downtown carries most of the pipeline
Price trend
$308,551 per unit; $9.3B trailing 12-month volume, +35% [168]
Q2 volume $2.56B, +39% YoY
Los Angeles Submarket Snapshot
The largest cities in the Los Angeles-Long Beach-Anaheim, CA metro. Rent and rent growth from Apartment List (Aug 2026); multifamily units permitted (buildings of 5+ units) from the Census Building Permits Survey. Permits lead construction by 12 to 24 months. Rows alphabetical; hover a row for detail.
MF units permitted, 2026 through Jul Census BPS [208]
2026 permit pace vs. 2025 annualized
Anaheim
$2,309
-0.0%
70
34
-17%
Burbank
$2,091
-1.0%
15
0
-100%
Fullerton
$2,436
+2.3%
40
0
-100%
Laguna Niguel
$3,137
+3.9%
0
0
n/a, no 2025 permits
Lake Forest
$3,317
+3.2%
0
0
n/a, no 2025 permits
Los Angeles
$2,075
-1.3%
6,599
8,481
+120%
Mission Viejo
$3,038
+3.9%
0
0
n/a, no 2025 permits
Pasadena
$2,514
-0.9%
325
14
-93%
Placentia
$2,470
+0.8%
0
0
n/a, no 2025 permits
Pomona
$1,906
-5.1%
235
0
-100%
Santa Clarita
$2,426
-3.2%
0
0
n/a, no 2025 permits
Tustin
$2,539
-0.1%
0
798
n/a, no 2025 permits
Los Angeles Transactions and Deal Flow
Los Angeles volume is deep but granular: $2.56 billion traded in Q2 across many mid-size deals [168]. August brought a West Hollywood sale at $266K per unit and a $36.7 million LA-area trade.
Property
Submarket
Units
Buyer / Seller
Price / Cap
Reported
Tournament Patio Apartments
Torrance
60
Good Capital Group; sold by JS Bower Foundation (CBRE). 1963 build, 1,023 square foot average unit
Agency lending (Fannie Mae and Freddie Mac) remains the workhorse: a combined $176 billion cap for 2026, half of which must go to affordable housing. As of Aug 31 low-leverage agency loans price in the mid-5s and higher-leverage quotes sit just above 6% [40]. Across all multifamily products, quotes run 5.43% to 6.63% [220]. CBRE put the average multifamily loan spread at 162 basis points in Q2, 15 tighter than a year ago, with lenders competing on price rather than leverage [219]. Bank bridge money runs SOFR plus 225 to 325 basis points, debt funds SOFR plus 300 to 450.
Agency Multifamily Rates, 2026 Trend
Freddie Mac indicative 5-year fixed at 1.25x debt coverage and 65% loan-to-value, top of the published range. One source throughout. Hover the points.
Source: BWE Market Rates [40], one rate sheet at three dates (Jan 20, Mar 9 and Aug 31, 2026). Indicative levels only; Freddie Mac prices each loan individually and does not publish pricing.
Lending Landscape
Programs, caps, and terms relevant to Los Angeles owners.
California's economy is slowing before it reaccelerates. UCLA Anderson forecasts total employment growth of 0.1% in 2025, 0.8% in 2026 and 2.5% in 2027, with several quarters of negative payroll growth before a mid-2026 recovery. Los Angeles County added 35,300 jobs (0.8%) over the year to June. Insurance availability, not property tax, is the cost issue.
Los Angeles has the lowest vacancy of the Western markets
National Rates and the Fed
The Fed held at 3.50 to 3.75% in July with an unusual three-member vote in favor of raising. Futures now put a quarter-point increase at the Sep 15 to 16 meeting at about 58%, after the Jackson Hole speech pushed the odds as high as 66%. The 10-year Treasury closed Sep 4 at 4.78%, its highest of the year, and August payrolls came in at 162,000 with unemployment steady at 4.1%.
Sources: Federal Reserve [17]; U.S. Treasury, Sep 4 [1]; BWE rate sheet, Aug 31 [40]. Decomposition is illustrative; spreads vary by leverage, term, and borrower, and a 5-year agency loan is priced off the 5-year index, not the 10-year.
10-Year Treasury vs. 30-Year Mortgage Rate, 1980 to today
Why apartments rent: the mortgage rate sets the cost of buying a house, and the gap between it and the Treasury is the part of that cost the market has added since 2022. Monthly averages, percent. Lower panel: mortgage rate minus Treasury, in percentage points. Hover for any month.
Sources: FRED series DGS10 [191] and MORTGAGE30US [192], monthly averages of daily and weekly data, refreshed each build (2026-09-04).
Global Backdrop
Global bond yields moved higher again as central banks turned from cutting to tightening. The European Central Bank raised its deposit rate to 2.25% in June, the Bank of Japan reached 1.00% for the first time since 1995, and the Japanese 10-year crossed 3% on Sep 2. Energy prices are elevated on Strait of Hormuz supply disruption, which adds to inflation.
10-Year Government Bond Yields
Where the U.S. sits vs. peers. Hover a bar for context.
Sources: U.S. Treasury, Sep 4 [1]; Bank of England, Sep 2 [209]; Deutsche Bundesbank, Sep 4 [210]; Japan Ministry of Finance, Sep 3 [211]. All four are the issuing authority's own published series.
Global Policy and Risk Snapshot
Central-bank posture and macro risks that feed into Los Angeles borrowing costs.
Factor
Status
Why Los Angeles cares
European Central Bank
Deposit facility 2.25%, raised from 2.00% effective Jun 17, 2026 [212]
The first ECB increase of this cycle; keeps global yields anchored higher
Bank of England
Bank Rate 3.75%, held Jul 30; next decision Sep 17 [209]
Gilt yields still rising to 4.70%, an inflation worry [209]
Bank of Japan
Policy rate 1.00%, raised Jun 16 and held Jul 31 [213]. JGB 10-year 2.97%, above 3% on Sep 2 [211]
Less Japanese demand for Treasuries, so higher U.S. yields
Oil and energy
Elevated Brent $96.02, WTI $91.48 on Sep 1; Hormuz flows 4.9 million barrels a day in Q2 [214]
Minus for inflation and Fed posture; no local energy offset
U.S. dollar
Index 99.16 on Sep 4, down 0.5% over the month and up 1.4% year to date [38]
A weaker dollar makes U.S. property cheaper for foreign buyers
Sources: European Central Bank [212]; Bank of England [209]; Bank of Japan [213]; Japan Ministry of Finance [211]; EIA [214]; Trading Economics [38].
BWE: Market Rates, as of Aug 31, 2026 (Fannie Mae DUS and Freddie Mac conventional fixed-rate ranges by term, DSCR and LTV tier); earlier BWE sheets as of Jan 20, 2026 and Mar 9, 2026 via the Internet Archive
Disclosures. Compiled Sep 4, 2026 from publicly available sources; figures are as reported by each source on the date shown and have not been independently verified. Where sources conflict, the range is shown. Items marked "Data unavailable" were not published or not captured in the period. Not investment advice.
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