Monthly multifamily market intelligence for local, state, national, and global context. Published by NVest Analytics. Every figure is sourced and dated.
October 2026
Phoenix MSA. Multifamily
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The Month in Three Parts
How We Got Here
Phoenix was the institutional favorite of 2021 to 2022; the supply that followed pushed conventional rents into a decline that was still running at -1.7% year over year in September [1].
Nationally, construction fell to 475,000 units, 3.5% of inventory, the lowest since 2013 [2].
The 10-year Treasury climbed from 4.78% on Sep 4 to 5.24% on Oct 1 [3].
The Fed raised its target range a quarter point to 3.75 to 4.00% on Sep 16 in a unanimous vote [4].
Arizona hiring has been the weak link; the state projects job growth of just 1.0% annualized from Q2 2024 through Q2 2026 [5].
Where We Are Now
Demand is outrunning supply: 21,712 conventional units absorbed against 13,112 added over the 12 months through September [1].
Conventional occupancy reached 88.4% in September, up 2.9% year over year, lease-ups included [1].
Effective rents still fell 1.7% to $1,530, and 46% of conventional properties offer concessions averaging 9.9% of rent [1].
Prices are rising into weak rents: average cap rate 5.8%, down 80 basis points in a year, at $266,672 per unit, up 3.6% [6].
Negative leverage: a 5.8% cap rate against agency 5-year debt quoted at 6.07% on Aug 31 [6][7].
Inflation is still above target: August PCE ran 3.4% headline and 3.0% core [8]; SOFR stood at 3.87% on Oct 1 [9].
Where We're Headed
Rates: after a weak September jobs report, futures price about an 86% chance the Fed holds at its Oct 27 to 28 meeting [10].
Supply: the construction pipeline is the smallest since early 2021, and first-half deliveries were the lightest midyear since 2022 [11].
Rents: with absorption running well ahead of deliveries, the year-over-year rent figure should keep closing on zero [1][11].
Jobs: the state Office of Economic Opportunity projects Arizona job growth of 1.0% annualized through Q2 2026 [5].
Water is the structural constraint: no new groundwater-only assured-supply approvals in the Phoenix AMA since June 2023, and HB 2722 extends the rule to build-to-rent [12].
Net: buyers are ahead of fundamentals; Keech Properties paid $250,262 per unit for Astor at Osborn in Midtown on Oct 1 [13].
What It Means for Phoenix
Refinance math got harder. The Fed raised rates to 3.75 to 4.00% on Sep 16 and the 10-year Treasury hit 5.24% on Oct 1 [4][3]. Phoenix owners with 2026 or 2027 maturities should model agency debt at or above the 6.07% quote of Aug 31 [7].
Buyers remain ahead of rents.Cap rates compressed 80 basis points to 5.8% and prices rose 3.6% to $266,672 per unit while conventional effective rents fell 1.7% [6][1]. The bet is on the shrinking pipeline, not current income.
The pipeline supports the bet. Phoenix absorbed 21,712 conventional units against 13,112 added over 12 months, and the construction pipeline is the smallest since early 2021 [1][11]. Occupancy already recovered to 88.4% [1].
Deals are clearing anyway. Four Valley sales were announced in 90 days, led by the $47.8 million Astor at Osborn trade on Oct 1 and ColRich's $52.4 million Mesa purchase [13][14]. Camden added The Tyler in Gilbert [15].
Arizona's economy is the weak link. Arizona projects job growth of just 1.0% annualized through Q2 2026 [5]. Population gains, up 59,065 to 5,228,938 residents in the year to July 2025, are carrying Phoenix apartment demand [16].
National rates set Phoenix's floor. With the Fed at 3.75 to 4.00%, the 10-year Treasury at 5.24% and futures pricing an 86% chance of an Oct 27 to 28 hold, Phoenix borrowing costs stay elevated into 2027 [4][3][10].
Global yields reach Phoenix too. UK gilts at 4.92%, Germany at 3.60% and Japan at 3.09% keep upward pressure on Treasuries, and the ECB raised its deposit rate to 2.50% on Oct 2 [17][18][19][20]. Higher global yields feed Phoenix mortgage pricing.
Phoenix Multifamily
Phoenix conventional occupancy reached 88.4% in September, up 2.9% year over year, as renters absorbed 21,712 units against 13,112 added over the past 12 months [1]. Effective rents still fell 1.7% to $1,530, and 46% of conventional properties offer concessions averaging 9.9% of rent [1]. First-half absorption above 12,400 units nearly doubled deliveries, and the construction pipeline is the smallest since early 2021 [11]. The average cap rate held at 5.8% [6].
The largest cities in the Phoenix-Mesa-Chandler, AZ metro. Rent and rent growth from Apartment List (Sep 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 Aug Census BPS [26]
2026 permit pace vs. 2025 annualized
Avondale
$1,304
-1.4%
286
0
-100%
Chandler
$1,581
+0.1%
526
0
-100%
Gilbert
$1,698
-0.9%
679
283
-37%
Glendale
$1,209
-2.9%
0
0
n/a, no 2025 permits
Goodyear
$1,544
-1.6%
700
0
-100%
Mesa
$1,296
-2.3%
935
1,140
+83%
Peoria
$1,409
-2.6%
176
336
+186%
Phoenix
$1,255
-2.9%
6,505
3,506
-19%
Surprise
$1,660
-3.7%
623
444
+7%
Phoenix Transactions and Deal Flow
Four conventional apartment sales were announced across the Valley in the past 90 days, led by the $47.8 million trade of Astor at Osborn in Midtown Phoenix on Oct 1 [13]. Buyers included Camden Property Trust and San Diego-based ColRich, with activity spread across Mesa, Gilbert and Peoria [15][14][27].
Financing costs moved up into October: the 30-year home mortgage rate hit 7.28% in the week of Oct 1, up 57 basis points from 6.71% on Sep 3, and the 10-year Treasury yield reached 5.24% on Oct 1 [28][29][3]. Agency lending remains the workhorse for apartment deals, with a combined $176 billion purchase cap for 2026 and half of volume required to be mission-driven[30]. SOFR stood at 3.87% on Oct 1, keeping floating-ratebridge money near 6 to 8% [9].
Agency Multifamily Rates, 2026 Trend
Indicative 5-year agency fixed rate at each dated quote. Hover the points.
Arizona's economy is growing slowly, and population gains rather than hiring are carrying Phoenix apartment demand. The state Office of Economic Opportunity projects job growth of 1.0% annualized from Q2 2024 through Q2 2026 [5]. Metro Phoenix added 59,065 residents in the year to July 2025, up 1.1% to 5,228,938 [16]. For owners, migration-driven demand keeps absorption tied to in-migration holding up.
Annual job growth for Arizona and the Phoenix metro.
Sources: Eller College of Management / Arizona Office of Economic Opportunity [34][5]
State-Level Operating Factors
Costs and policy that hit Phoenix net operating income directly.
Factor
Status
Read-through
Property insurance
Exposure to wildfire, flash flood and severe storms drives multifamily premiums [35]
Less severe than Texas or Georgia; still rising
Property tax
Maricopa County Assessor 2025-2026 Full Cash Value analysis published; multifamily change not itemized in the public summary [36]
Arizona's Prop 117 caps annual limited-value growth at 5%
Population and migration
Metro Phoenix +59,065 in the year to Jul 2025; 5,228,938 residents, up 1.1% [16]
Population growth, not hiring, is carrying apartment demand
Water policy
No new groundwater-only assured-supply approvals in the Phoenix AMA since June 2023; HB 2722 extends the requirement to build-to-rent [12]
Constrains new supply outside water-served cities; supports existing stock
Peer metros (Q2 2026)
DFW rents -1.6 to -2.1% YoY [37]. Atlanta vacancy 7.2% [37]. Charlotte vacancy 4.0% [37]
Phoenix leads the group on absorption
National Rates and the Fed
The Fed raised its target range a quarter point to 3.75 to 4.00% on Sep 16 in a unanimous vote, the first hike since July 2023 [4]. The 10-year Treasury reached 5.24% on Oct 1, up from 4.78% on Sep 4 [3], and the 30-year mortgage hit 7.28% in the week of Oct 1 [28]. August PCE inflation ran 3.4% headline and 3.0% core [8]. After a weak September jobs report, futures price about an 86% chance the Fed holds at its Oct 27 to 28 meeting [10].
Sources: U.S. Treasury and Freddie Mac, monthly averages through Oct 1, 2026; FRED for the 10-year before 2026 [3][28][40]
Global Backdrop
Global bond yields moved higher again as central banks kept tightening. The U.S. 10-year Treasury yield was 5.24% on Oct 1 [3], with the UK gilt at 4.92% on Sep 30 [17], Germany at 3.60% [18] and Japan at 3.09% on Oct 1 [19]. The Federal Reserve raised its target range to 3.75% to 4.00% on Sep 16 [42], and the ECB deposit rate reached 2.50% on Oct 2 [20]. Higher global yields feed directly into U.S. borrowing costs.
10-Year Government Bond Yields
Where the U.S. sits vs. peers. Hover a bar for context.
Sources: U.S. Treasury, Oct 1; Bank of England, Sep 30; Deutsche Bundesbank, Oct 1; Japan Ministry of Finance, Oct 1 [3][17][18][19]
Global Policy and Risk Snapshot
Central-bank posture and macro risks that feed into borrowing costs.
Factor
Status
Why Phoenix cares
European Central Bank
Deposit facility 2.50% on Oct 2, raised from 2.25% effective Sep 16 [20][43]
The second ECB increase of this cycle; keeps global yields anchored higher
Disclosures. Compiled Oct 2, 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. Not investment advice.
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