Apartment sales started 2026 on a soft note, with transaction activity declining sharply even as pricing momentum showed signs of stabilization.
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Sales volume fell 25% year over year to $8 billion in January 2026, declining across every subtype, according to data from MSCI Real Assets shared with Multifamily Dive. At the same time, the Real Capital Analytics commercial property price indexes for multifamily slipped 0.1% year over year.
The retreat in volume reflects persistent friction between buyers and sellers over pricing expectations, as well as continued volatility in capital markets.
Performance varied widely by asset class. In January, mid- and high-rise trades fell 39% year over year to $2.7 billion. That drop was more than double the decline seen in garden property transactions, which decreased 15% year over year to $5.3 billion.
Entity-level apartment deals saw the steepest contraction, plunging 64% year over year to $600 million. Meanwhile, individual asset sales proved somewhat more resilient but still fell 18% to $7.4 billion.
The slowdown comes after multifamily investors entered 2026 with cautious optimism. Many expected transaction volume to rebound following two challenging years defined by higher interest rates and tighter lending standards.
“At some point, the market is going to shake loose,” Matt Ruesch, co-founder of Washington, D.C.-based investment firm Broad Creek Capital, told Multifamily Dive last year. “I think a lot of people were expecting that to happen in 2025, but there’s been a lot of volatility in the market too.”
Despite the drop in deal flow, pricing trends suggest the pullback is not rooted in collapsing demand. MSCI noted that values have risen steadily over the last several months.
“Momentum for price growth is healthy, however, with monthly rates improving over each of the last nine months,” according to MSCI.
That steady price recovery could help narrow the valuation gap between buyers and sellers later this year, potentially unlocking additional transactions.
While January’s figures underscore continued caution, larger transactions announced in recent weeks signal that activity may pick up as 2026 progresses.
Last week, Veris Residential announced it would be acquired by an investor consortium led by Affinius Capital in partnership with Vista Hill Partners in a $3.4 billion all-cash transaction.
The deal is expected to close in the second quarter of 2026, subject to shareholder approval at Veris and other customary closing conditions. If completed, the transaction could provide a noticeable boost to quarterly sales totals in April, May or June.
MSCI reported that institutional investors accounted for 25% of apartment purchases in 2025 but only 19% of dispositions — a sign that larger capital sources have been gradually rebuilding positions after sitting largely on the sidelines in prior years.
“There was growth in apartment sales for all of 2025, but the cast of players active in the market was changing, with institutional capital regaining prominence,” MSCI wrote.
Private investors remained the dominant buyers in 2025, responsible for 65% of acquisitions. However, they also accounted for 67% of sales, slightly trimming their overall exposure.
Over the past several years, private capital stepped in to fill the void as institutions pulled back amid uncertainty. Now, the pendulum may be swinging again.
“Our real leading indicator is how active are institutional equity sources — the insurance companies, the opportunity funds, the endowments, pension funds,” Dan Byrnes, CEO of Security Properties, told Multifamily Dive last fall. “How strong is their appetite for multifamily product? And it has not been stronger at any point in the last several years.”
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Several broader economic factors will shape multifamily investment activity in 2026:
If institutional appetite continues to strengthen and financing conditions gradually ease, multifamily transaction volume could accelerate in the second half of the year — even if January’s numbers suggest a slow start.
For now, the sector appears to be in a transitional phase: pricing is stabilizing, capital sources are reshuffling and investors are waiting for clearer signals before deploying at scale.
Originally reported by Leslie Shaver, Senior Reporter in Construction Dive.
