Baltimore Multifamily Market Report Q2 2026
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Executive Summary 1,246 12 Month Delivered Units 1,093 12 Month Absorption Units 7.5% Vacancy Rate 1.2% 12 Month Asking Rent Growth Baltimore’s multifamily market in the first half of 2026 remains stable but subdued, with gradual improvement rather than a strong recovery.
Demand has slowed, as annual net absorption of 1,100 units is well below the 10-year average, while vacancy remains elevated at 7.5% despite a slowdown in new apartment deliveries.
Rent growth has stabilized at 1.2% annually, outperforming the national average but far below the rapid gains seen in the early 2020s. Higher rents continue to be concentrated in amenity- rich, employment-focused submarkets such as Canton, Federal Hill, and Annapolis, while older neighborhoods in Northeast and South Baltimore remain more affordable.
Weak employment growth has limited household formation, though Baltimore’s strong healthcare and education sectors, along with its affordability relative to Washington, D.C., continue to support renter demand.
Overall, the market is moving toward balance as new supply eases, but elevated vacancy, modest demand, and slow rent growth suggest another year of gradual adjustment rather than significant acceleration.
@2026 Costar Group
Baltimore’s multifamily market continues to adjust to recent oversupply, with vacancy at 7.5% and annual absorption of 1,100 units, well below historical averages.
Demand remains strongest for 4 & 5 Star properties, while lower-tier (1 & 2 Star) communities experienced negative absorption as renters shifted toward renovated and mid-tier options.
The 3 Star segment saw moderate demand and maintained relatively low vacancy.
Performance varies significantly by location. Canton and Federal Hill led leasing activity due to their amenities and employment access, although Federal Hill is experiencing elevated vacancy from a surge of new luxury deliveries.
Several suburban areas, including East Anne Arundel County and West Baltimore County, continued to see net move-outs.
Vacancy
Looking ahead, leasing is expected to remain steady but modest. Weak job growth is likely to limit household formation, but Baltimore’s affordability, strong healthcare and education employment base, and slowing pace of new construction should help stabilize occupancy. Concessions are expected to remain common in core urban submarkets through 2026, while well-located suburban properties should see more stable performance.
@2026 Coastar Group @2026 Costar Group
Baltimore’s Rent Baltimore’s rent growth has stabilized at a modest but above-national pace of 1.2%, reflecting a more balanced market after several years of volatility.
Affordable 1 & 2 Star properties posted the strongest gains, while 4 & 5 Star communities saw slower growth due to elevated vacancy and widespread concessions. Premium rents remain concentrated in Canton, Federal Hill, and Annapolis, while older neighborhoods continue to offer more affordable options. Looking ahead, rent growth is expected to remain moderate as high vacancy limits pricing power in luxury submarkets, with suburban communities positioned to outperform until excess supply is absorbed.
@2026 Costar Group @2026 Costar Group
Construction Baltimore’s multifamily development pipeline has slowed to a more sustainable pace, with 3,200 units under construction (1.5% of inventory) as the market absorbs the large wave of deliveries from 2023–2024.
Development remains concentrated in downtown, where adaptive reuse projects such as office-to-residential conversions are gaining momentum, and Canton, which continues to attract large luxury developments. In the suburbs, Howard County remains a key growth area, supported by demand for affordable housing, quality schools, and convenient access to employment centers.
The pipeline is heavily weighted toward high-end properties, while rising construction costs and tighter financing continue to limit mid-market development.
Looking ahead, new construction is expected to slow further, with adaptive reuse and suburban infill projects playing a larger role in future supply.
Properties 3,240 Units 1.5% % Inventory 171 Avg No Units - - - - - - - - - - - - Under Construction Properties @2026 Costar Group
Baltimore’s multifamily investment market is gradually recovering, with trailing 12-month sales volume reaching $1.4 billion , up from 2023 levels but still below the long- term average of $1.8 billion . Investors are increasingly targeting high-quality suburban and well-located urban assets, as demonstrated by major transactions such as Milbrook Park Apartments and The Zenith, while value- add opportunities continue to attract private buyers.
Strong demand remains concentrated in affluent suburban markets, supported by stable demographics and solid occupancy fundamentals. Although elevated borrowing costs and cautious underwriting continue to constrain activity, improving transaction volume and a wide range of cap rates reflect a market that is steadily normalizing. Looking ahead, Baltimore’s relative affordability and resilient employment base are expected to support continued investment activity through 2026.
Baltimore Sales
@2026 Costar Group @2026 Costar Group
128 Sale Comparables $170 Avg Price/Unit $15 Avg Price (mill.)
6.9% Avg Vacancy at Sale Sales Past 12 Months Sale Information Property Information Rating Property Name/Address Yr Built Units Vacancy Sale Date Price Price/Unit Price/SF - - - - - - - - - - - - - - - - - @2026 Costar Group
Economy The Baltimore region benefits from a diverse and highly educated workforce, supported by leading healthcare and educational institutions that anchor the local economy. While employment declined slightly over the past year, with jobs down 0.5%, the market remains resilient with 1.5 million jobs , a 3.9% unemployment rate (below the national average), and a median household income of $100,000 .
Healthcare and education continue to drive long-term stability, while office and industrial employment has remained relatively flat. Although job growth is expected to moderate through 2030 due to broader economic conditions, Baltimore’s strong talent base, high educational attainment, and resilient healthcare sector are expected to support steady economic performance.
@2026 Costar Group
@2026 Costar Group @2026 Costar Group
Interest Rates and Current Loan Terms The FOMC held the target range at 3.50%– 3.75% at its June 17, 2026 meeting by a 12-0 vote, with the Committee citing support for the Fed’s dual mandate and reaffirming ample reserves in the banking system. That’s been the setting through Q2 — this marked the fifth consecutive meeting with rates unchanged as of late July, so it was flat all quarter. Effective fed funds was running around 3.63% by early July.
Federal Reserve — Federal Funds Rate 3.50%–3.75%
As of the most recent data (late July), the 10-year sits around 4.6%–4.7% and the 5-year around 4.28%. I don’t have exact quarter-end (6/30/26) closing prints from this search — for the precise Q2-end and Q2- average figures you’ll want to pull the daily series directly from FRED (DGS10 / DGS5) or Treasury.gov’s daily yield curve rates, filtered to April–June 2026.
Federal Reserve — Federal Funds Rate Date 5-Year 10-Year 4/1/26 (Q2 open) 3.97% 4.33% 4/30/26 4.02% 4.40% 5/15/26 4.26% 4.59% 5/29/26 4.13% 4.45% 6/17/26 (Fed hold day) 4.27% 4.49% 6/30/26 (Q2 close) 4.19% 4.44% @Trepp CMBS Research
Multifamily Delinquency and Foreclosure Trends The overall U.S. CMBS delinquency rate fell 20 basis points in June 2026 to 7.35%, driven largely by the cure of a large Florida lodging portfolio loan.
CMBS Market Summary – June 2026 CMBS Delinquency by Property Type 30+ DAYS DELINQUENT CMBS Market Snapshot Current rate (7.35%) is up slightly from 7.13% a year ago, but down from 7.55% three months ago.
Trent Context If loans past maturity but current on interest were counted, the rate would be 9.53% — 218 bps higher than the headline figure, underscoring ongoing refinancing/ maturity pressure across the market.
Maturity Risk (60+ days, foreclosure, REO, or non-performing balloon): 7.16%, down from 7.30%.
Seriously Delinquent Rate $2.64 billion in newly delinquent loans in June, led by a Southern California super-regional mall, a New Hampshire regional mall, a New York office complex, a Minneapolis mixed-use tower, and a Manhattan multifamily property.
65% of new delinquencies were non-performing matured balloon loans.
New Delinquencies
Baltimore remains one of the most foreclosure-stressed metros in the U.S. As of May 2026, it had the nation’s second-highest foreclosure filing rate (1 in 1,804 units), and Maryland ranked among the ten worst states overall (0.19% rate). Unlike the national trend of rising bank repossessions (REOs up ~33-35% YoY), Baltimore’s REOs actually fell (74 → 59, Feb 2025 vs. Feb 2026), suggesting more foreclosures are resolving before the bank takes title.
The standout local issue is ZIP code 21217, which had the highest “zombie foreclosure” rate in the country — 51.6% of in-process foreclosures there sit vacant, a red flag for blight and code enforcement. Baltimore also has a high share of distressed/REO listings in its resale market, alongside similarly priced, older-housing metros — and nationally, these homes sell at a 27.2% discount and take ~11 extra days to sell.
Baltimore-Area Foreclosures & Lender Ownership 0.3% Pre-Pandemic Average Multifamily CRE PDNA rate.
Bank Loan Delinquencies 1.4% Q4 2025 Multifamily PDNA Compared to 0.3% pre pandemic.
1.67% Largest banks. Median CRE loan PDNA. Down 25 bps from peak of 1.92% at YE 2024.
1.45% Industry Total (CRE PDNA) PDNA rate in Q4 2025. Slightly higher than a year earlier.
@Trepp CMBS Research
Analyst Commentary Capital Market Overview Baltimore’s multifamily investment market continued its gradual recovery in Q2 2026, with trailing 12-month volume improving to $1.4 billion but still tracking well below historical averages. Elevated interest rates and tighter lending continue to limit deal flow, but capital is cautiously re-entering the market, concentrated on high-quality assets, well-located suburban communities, and value-add opportunities.
Strong demand persists in affluent suburban submarkets such as Howard County given their stable demographics and school systems, while pricing continues to reflect wide dispersion depending on risk profile, with average cap rates near 7.1% and a range spanning low-4% stabilized trades to double- digit yields on repositioning assets. Overall, the market is stabilizing, with measured optimism for continued improvement in investment conditions through the remainder of 2026.
Projection Market Fundamentals Outlook Baltimore’s multifamily market is stabilizing further as it moves through the second half of 2026, though the recovery remains gradual. Demand is still relatively soft, with trailing annual absorption in the 1,000–1,100 unit range, while vacancy has eased modestly to 7.5% and is expected to continue tightening slowly as new supply keeps tapering.
Performance remains uneven, with stronger leasing in amenity-rich urban submarkets like Canton and Federal Hill and in affluent suburban areas, while older and mid-tier assets continue to lag.
Baltimore’s multifamily market is expected to remain broadly stable through the remainder of 2026, with modest rent growth and a gradual continued improvement in occupancy as supply pressures keep easing. Investment activity should continue its slow recovery, driven by demand for well-located suburban assets and repositioning opportunities, even as softer job growth tempers the pace of improvement. Overall, investors focused on operational efficiency and value-add strategies remain best positioned to capture upside, and those entering the market now can benefit from improving fundamentals and relative affordability over the next 1–2 years.
7.5% Vacancy expected to trend gradually lower toward the high-6% to low-7% range as supply slows and demand stabilizes 1.2% YoY Rent Growth Strongest in 1–2 Star and suburban assets, while Class A remains pressured by concessions ~$1.4B Sales Trailing 12-month volume; still below the ~$1.8B long-term average, with capital focused on suburban and value-add opportunities ~6.5% Cap Rates Market average; 7.0–8.5% typical for B/C assets, low-4% for stabilized Class A, and value-add opportunities pricing higher
YAAKOV KANEVSKY Managing Director 410-498-5408 yaakov@midfieldre.com 3635 Old Court Rd Suite 403 Pikesville, MD 21208 www.midfieldre.com | info@midfieldre.com | (410)-324-6939 MENDEL DALFIN Director 410-916-9256 mendel@midfieldre.com