Philadelphia, PA Multifamily Market Report Q2 2026
Philadelphia Clears Its Biggest Supply Wave in a Decade as Vacancy Falls to 3.4%
Demand
Philadelphia’s vacancy fell to 3.37% in Q2, down 63 bps from Q1, one of the tightest readings the metro has posted in years. Job growth has cooled sharply, up just 0.33% YoY through April versus 3.16% in 2022, though healthcare and life sciences hiring keeps anchoring demand. Net absorption of 4,033 units ran nearly three times the quarter’s 1,423 completions. Delaware County and Gloucester County are the tightest submarkets at 2.1% and 2.2% vacancy, while Southwest Philadelphia trails at 4.7%, still working through recent deliveries.
Supply
The region is coming off its heaviest supply wave in more than a decade, and the pipeline is now clearing fast. Units under construction have fallen to 10,047, just 2.33% of inventory versus a 4.56% share in early 2024, while TTM completions of 6,920 units are down 35.3% YoY. Third-party estimates put full-year 2026 deliveries near 7,000 units, back near the long-run average after 2024 and 2025 both topped 8,000. Center City and Northwest Philadelphia/King of Prussia still carry the heaviest remaining pipelines.
Investment Market
On a TTM basis, capital kept flowing into Philadelphia: volume reached $2.34B, up 20.0% YoY, even though Q2 alone looked soft at $257.7M against an unusually large $783.2M a year earlier, a reminder that single portfolio trades can swing any one quarter here.
Pricing stayed steady through it, with PPU at $188,761 (+1.9% YoY) and cap rates essentially flat at 6.08%. Buyers appear to be underwriting the tail end of the supply cycle rather than reacting to any one quarter’s number.
Volume
- TTM $2.34B, up 20% YoY
- Q2 $257.7M, down sharply on lumpy comps
- Recovery from 2023’s cycle-low trough
Pricing
- PPU $188.8k, up 1.9% YoY
- Cap rate flat at 6.08% YoY
- Rent growth set to climb to 4.3% by year end
