US multifamily housing demand surges amid rising office conversions

The United States multifamily housing sector is experiencing significant shifts in demand and construction. In the second quarter of 2026, net absorption reached 124,600 units, marking an 8% year-over-year increase and the fifth-highest quarterly absorption in nearly 25 years. This surge in demand comes even as median asking rents in the 50 largest metros declined by 1.5% annually to approximately $1,700, though they remain 16% above pre-pandemic levels.

Regional trends show the Sun Belt leading the market, with Dallas-Fort Worth, Phoenix, Atlanta, and Austin recording strong absorption totals. Conversely, permitting for new construction has hit multi-year lows in major markets like New York City and Boston, potentially tightening future supply.

Parallel to these market shifts, the trend of converting vacant office buildings into multifamily housing is accelerating. At the start of 2026, approximately 90,300 new apartment units were under construction through office-to-residential conversion projects, representing a 28% increase year over year. Experts note that these adaptive reuse projects require intensive early planning regarding network infrastructure to meet modern residential connectivity and smart building demands.