3 MIN READ
September 26, 2026
$1 trillion of multifamily loans are coming due in the next four years. The carnage has been slow because lenders have been willing to work with stretched borrowers. They have extended interest-only periods, taken additional collateral to secure loans, and ignored loan covenants in the hope, alongside the borrower, that there was light at the end of the tunnel. They hoped interest rates would come down in the second half of 2026 and into 2027, the economy would stay strong, and overbuilt inventory would be leased up, reducing overall competition. Two of those three things have happened so far, but interest rates drive pro formas, and an extra 100 bps run-up in the 10-year Treasury year over year will take a lot of steam out of pro formas.
Source: JPI Research, RealPage Market Analytics
Early signs show the epic oversupply of new multifamily construction in some markets is working its way through the system, and rents are rising. Even Austin, one of the most vibrant economies in the US, is still dealing with negative year-over-year market rates, but not for long. It’s likely to turn positive year over year. It might be too little too late for many multifamily owners trying to hang on.
While soft, multifamily has a bit of a tailwind as long-term rates rise. The 30-year mortgage topped 7% this week, which is a gut punch for the multifamily renter who was also hoping home mortgage rates would drop enough to make homeownership a reality.
Renters will stay longer, absorb rent increases and additional fees, and find their motivation and ability to buy a home pushed further out of reach.