— By Jordan Carter and Clay Newton of Kidder Mathews —
Portland’s multifamily market is showing signs of stabilization after working through one of the largest apartment construction cycles in its history, compounded by one of the most dramatic swings in lending rates in recent memory. This combination compressed investment activity, weighed on asset values and drove sales volume to decade lows.
Demand remains healthy, with apartment absorption over the past 12 months totaling about 3,500 units, in line with long-term historical averages and nearly double the trough of 2023. Vacancy currently sits at 7.1 percent, down from its 2024 peak and below the national average of 8.3 percent.
The most consequential shift is the rapid decline in new supply. As of mid-2026, about 2,400 units remain under construction, totaling roughly 1 percent of inventory growth. Deliveries in 2025 were half of 2024 levels, and 2026 is projected to be half of 2025. This is creating the lightest new supply environment in more than a decade as higher interest rates, rising construction costs and tighter lending standards have constrained development.
Rent growth remains under pressure but should bottom out near-term as the supply demand balance continues to tighten. Asking rents have stabilized around $1,670 per month — roughly in line with 2022 levels — with annual rent growth at about -0.6 percent. Concessions remain common in urban core submarkets, including Downtown, NW and SE Portland where new Class A inventory has been concentrated. Suburban markets have demonstrated greater resilience but are not immune to concessions.
Vancouver, Wash., continues to be the region’s stand-out performer. Driven by employment growth, tax advantages and strong leasing fundamentals, the submarket now represents more than half of the metro area’s active construction pipeline while posting some of the strongest absorption numbers in the region.
Investment activity remains below historical norms but is stabilizing. Multifamily sales volume totaled about $1.3 billion in 2025, a slight drop from 2024. Institutional investors and REITs have re-entered the market, focusing on newer, high-quality assets, while many private investors remain cautious. Cap rates for premium assets generally sit in the low- to mid-5 percent range, while workforce housing commonly trades above 6 percent. Values across the Portland metro are down 25 percent to 35 percent from their 2022 peak, depending on vintage, location and asset quality, with older urban core properties taking the hardest hit. Suburban and Vancouver assets have fared better, down closer to 10 percent to 15 percent.
One notable demand-side variable to watch is Portland’s labor market, which contracted by more than 20,000 jobs in 2025 and ranks last in employment growth among the top 54 U.S. metros. However, with new deliveries falling sharply — projected to reach decade lows — the supply side relief is expected to outweigh soft demand, driving vacancy gradually lower through 2026 and into 2027. As supply pressures ease and rent growth returns to positive territory, Portland’s multifamily market appears positioned for a more balanced and sustainable recovery.
— By Jordan Carter and Clay Newton, executive vice presidents at Kidder Mathews. This article was originally published in the July 2026 issue of Western Real Estate Business.