February 20, 2026

Raleigh-Durham’s multifamily transaction activity rebounds in the fourth quarter

Q4 2025

Raleigh-Durham multifamily market overview

Supply growth in the Raleigh-Durham multifamily market has weighed on fundamentals, but renter demand has remained elevated. The market posted net absorption totaling roughly 10,200 units in 2025, following move-ins of nearly 11,000 units in 2024. This absorption figure of more than 21,000 units since the beginning of 2024 outpaced levels from the preceding four years combined, highlighting that elevated levels of new supply have been met with record levels of demand. Demand has been strong on the Raleigh portion of the market, tracking traditional trends. The Northeast Raleigh, Downtown Raleigh, and North Cary/Morrisville submarkets accounted for roughly 40% of the absorption in the region in 2025. Market-wide demand has been strong enough to limit some of the impact of supply-side pressures on operating conditions. Vacancy is up just 60 basis points since the beginning of 2024, despite inventory increasing by more than 10% during this period.

While sales activity in Raleigh-Durham was below historical levels for the full year, properties changed hands at a rapid clip during the fourth quarter. Total sales in the last three months of 2025 tracked averages from the same period of the last 10 years. Downtown Durham posted the highest concentration of sales in 2025, as activity in this area surged late in the year. Nearly all the properties that changed hands in Downtown Durham were older vintages, with 80% of these assets being built prior to 2000. This ran counter to the market-wide trend. In Raleigh-Durham, properties built in the 2020s made up 30% of sales during 2025, while 2000s- and 2010s-vintages combined for another 30%. Similar splits were recorded in the previous two years. Cap rates have been consistent, averaging between 5.0% and 5.5% throughout 2025.

Looking ahead in Raleigh-Durham

After heightened deliveries in each of the past two years, the pace of new construction in Raleigh-Durham will slow by more than 60% in 2026. The slowing pace of new construction and anticipated levels of continued absorption should combine to result in the market's first annual vacancy improvement since 2021. That modest vacancy tightening should allow for a slight increase in area rents, although gains will lag long-term growth trends in a still competitive leasing environment. Over the longer term, the steep decline in permitting levels closer to historical levels will benefit the supply-demand balance in the region through the remainder of the decade.

Sales activity in the Raleigh-Durham multifamily investment market may return to traditional levels in the coming quarters following a strong close to 2025. With the pace of deliveries scheduled to fall in 2026, property performance is expected to improve, which will likely bring investors off the sidelines. New builds should continue to trade at a strong clip, and this trend may ramp up in the coming years as the recent inventory additions lease-up. Of the properties built in the 2020s that have changed hands during the past two years, nearly all are recording vacancy rates of below 15%. There will likely be stronger investor interest once the properties built since the beginning of 2024 begin to stabilize.