Affordability, rising supplier costs, and slowing construction activity are shaping the 2026 market. At the same time, digital tools, sustainability, and new rental models are creating opportunities.
Key Trends:
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First-time homebuyers face affordability challenges
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New construction is slowing
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Land banking is gaining popularity
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Supplier costs are rising, driving automation
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Sustainability is attracting tenants
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Build-to-rent communities are expanding
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Asking rents remain above pre-pandemic levels
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Real estate operations are going digital
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Investors are exploring nontraditional assets
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Teams are doing more with less
Success in 2026 requires rapid adaptation, leveraging technology, and meeting renter expectations.
Explore smart investments and opportunities now: vipproperty.com
Affordability is top of mind for nearly everyone in real estate heading into 2026. Mortgage rates are still hovering around seven percent, first-time buyers are seeing their lowest share of the market since the early 1980s, and rents—though steadier than in recent years remain well above pre-pandemic levels.
At the same time, property managers and finance teams are being asked to do more with less, while new technology changes the way the back office runs.
1. First-Time Homebuyers Struggling with Affordability
Homeownership remains an elusive goal for many younger Americans, with first-time home buyers making up the lowest share of the market since 1981. Mortgage rates hovered near six to seven percent in 2025, and home prices remained persistently high, which created a significant barrier for first-time buyers. This trend has a ripple effect across the real estate market: those who can’t afford to buy will stay in the rental pool for longer.
2. Slowing Pace of New Construction
New home construction has been on a steady decline since its 2022 peak. Builders are cautious, facing rising costs of materials, labor shortages, and tighter financing conditions. That pullback also reflects the record wave of multifamily homes that hit the market in 2024. With demand cooling, many developers hit pause on starting new projects. But now that surge has leveled off, and with fewer projects breaking ground, the pipeline is thinning out again.
3. Land Banking Gains Momentum
2025 also saw a renewed focus on land banking. Rather than buying land outright and holding it on their balance sheets, many builders are partnering with specialized investors who acquire construction-ready lots and hold them until the builder is prepared to break ground. This arrangement helps builders conserve cash while still securing a pipeline of future developments, a strategy that’s proving especially useful in today’s uncertain market.
4. Supplier Costs Continue To Rise
Suppliers are the backbone of real estate and property management landscapers, maintenance crews, cleaners, security, and utility providers all keep buildings running smoothly. But in 2025, property managers saw supplier costs climb across the board: according to AvidXchange’s 2025 Economic Sentiment Survey, 83% of real estate and community association management finance professionals reported cost increases from their vendors or suppliers due to inflation. That pressure is expected to carry into 2026, forcing property managers to rethink contracts.
For many, AP automation is helping manage the strain by improving supplier satisfaction. Suppliers can get paid how and when they want, which not only strengthens relationships but also gives property managers more leverage when it’s time to renegotiate contracts. The reporting and analytics built into AP automation also make it easier for property managers to see where the money is going. It helps them find opportunities to consolidate vendors, compare costs, and optimize spending across properties.
5. Sustainability Attracts More Tenants
Sustainability has often been framed as part of corporate responsibility, but in 2026 it’s increasingly an expectation from renters themselves. Eco-friendly features like smart thermostats, efficient lighting, and connected appliances have become part of what today’s tenants look for when choosing where to live.
The 2021 Buildium Annual Renters’ Report found that smart home technology ranked among the top ten amenities renters want in their homes. For property managers, that means investments in sustainability can pay off in stronger tenant demand, higher retention, and even the ability to market a community as “luxury” without the risk of looking outdated.
Today’s renters also favor properties that lean into digital conveniences like resident portals, online payments, and eStatements over communities that are still paper-driven. Positioning your property as both sustainable and digital-first can be a powerful differentiator in a competitive market.
6. Build-to-Rent Is Booming
The affordability crisis is fueling demand for build-to-rent communities: entire neighborhoods designed and constructed specifically for long-term renters. Instead of selling units individually, developers are creating master-planned communities with rental homes, shared amenities, and professional management.
The model is attractive to families priced out of homeownership but still seeking stability and community-oriented living. And the sector is expanding quickly: nearly 39,000 new single-family rentals came online in 2024, and by 2025 more than 100,000 additional homes were already in the development pipeline.
7. Asking Rents Hold Steady Above Pre-Pandemic Levels
After a period of softness driven by the pandemic building boom, asking rents are starting to show renewed strength. Nationally, the median U.S. asking rent rose 1.7% year over year in July 2025—a roughly $30 increase marking the largest annual gain since early 2023, according to Redfin.com. July was also the second straight month of year-over-year increases after more than two years of declines or flat growth, the Redfin study said. Even with these recent upticks, asking rents are still below the record highs of 2022. That makes the current market feel less overheated, while still keeping prices well above pre-pandemic levels.
8. Real Estate Goes Digital
The digital transformation of real estate is accelerating in 2026. From AI-powered market analytics that help predict tenant behavior to automation tools that reduce the friction of back-office operations, digitization is redefining efficiency.
Even the most traditional aspects of finance are shifting. Paper checks are on their way out nearly half of Americans didn’t write a single check in 2023 and both tenants and suppliers increasingly prefer electronic payments.
This is changing the way back-office work gets done in real estate teams. Accounts payable automation, mobile approvals, and integrated property management are quickly becoming the norm.
9. Real Estate Expands Beyond the Usual Property Types
The definition of real estate investment will expand in 2026. While traditional categories like residential, multifamily, and office remain core, investors are increasingly pursuing opportunities in nontraditional sectorssuch as data centers, logistics hubs, and healthcare facilities. These assets not only diversify portfolios but also capture growth in industries with rising demand.
10. Real Estate Teams Are Doing More with Less
One of the most pressing realities for real estate finance teams in 2026 is the need to deliver results with fewer resources. According to AvidXchange’s 2025 Economic Sentiment Survey, more than half of real estate middle market finance professionals said they were being asked to “do more with less” due to labor market challenges.
Leaner staffs must still manage growing portfolios, maintain supplier relationships, and ensure timely payments. Many are turning to automation, such as real estate AP automation, to bridge the gap reducing manual tasks, helping smaller teams stay competitive, and giving them the capacity to support future growth.
Looking Ahead at Real Estate in 2026
Affordability pressures, rising supplier costs, and a cautious construction pipeline are all shaping how the market looks in 2026. At the same time, digital tools, new development models, and shifting renter expectations are opening up fresh opportunities. For real estate professionals, success in 2026 is about finding ways to adapt: by running leaner operations, strengthening supplier relationships, and keeping a close eye on what tenants want.
Important Notice: This content is intended solely as a research tool for informational purposes and not as investment advice or recommendations for any particular action or investment and should not be relied upon, in whole or in part, as the basis for decision making or investment purposes. Any estimates, projections, and information contained herein have been obtained from public sources or are based upon estimates and projections and involve numerous and significant subjective determinations, and there is no assurance that such estimates and projections will be realized. This content does not in any way reflect expectations for (or actual) AvidXchange operational or financial performance. Explore smart investments and opportunities now at vipproperty.com
FAQ
Why are first-time homebuyers struggling so much right now?
High mortgage rates (around ~6–7%) and elevated home prices are significantly reducing affordability. For many younger buyers, this means staying in the rental market longer instead of purchasing.
Is new construction expected to rebound soon?
Not necessarily. Builders are cautious due to high costs (materials, labor), tighter financing, and a recent wave of multifamily supply that has cooled demand. According to PwC/ULI, multifamily starts dropped sharply entering 2026. (PwC)
What is land banking, and why is it growing in popularity?
Land banking refers to acquiring land (or construction-ready lots) and holding it for future development. Builders are increasingly partnering with investors to secure these lots without tying up too much capital. This helps manage risk in uncertain markets.
How are rising supplier costs affecting property management?
Many property managers report vendor cost increases (e.g., for cleaning, maintenance, landscaping). (AvidXchange) To mitigate this, teams are using AP automation to streamline payments, improve vendor relationships, and better analyze spending.
How does sustainability actually drive tenant demand?
Renters now expect eco-friendly and smart features (smart thermostats, efficient lighting, connected appliances). These features help with retention, appeal, and positioning a property as modern but not outdated. (AvidXchange)
Resources
To deepen your understanding of the trends and back up your insights, here are some key sources, research reports, and articles:
PwC / Urban Land Institute – Emerging Trends in Real Estate® 2026
This is a foundational report for understanding macro trends, capital markets, and sector outlooks. (PwC)
ULI Knowledge Finder has a full digital report. (ULI Knowledge Finder)
PwC Multifamily Outlook
Offers detailed insights on how affordability is impacting multifamily supply and demand. (PwC)
AvidXchange – “10 Real Estate Trends to Watch in 2026”
Breaks down trends with a particular focus on operations (e.g., supplier costs, AP automation).
Kiplinger – Business Costs Forecast for 2026
Provides macroeconomic context, including real estate cost pressures, rent outlook, and inflation forecasts. (Kiplinger)
NextHomeHMR – Real Estate Trends 2026
Explores how AI and IoT will shape future homes (smart living, interconnected devices). (nexthomehmr.com)
Academic Paper: “The Architecture of Trust”
This paper explores how AI-augmented valuation (appraisals) will evolve with regulatory changes and structured data. (arXiv)
Academic Research on Tokenization via Blockchain
Discusses how real estate assets can be fractionally owned and traded using blockchain, potentially lowering barriers to entry.
Turkish Real Estate Perspective – EmlakPost & EmlakDream
For a localized view of how these global trends (e.g. digitization, interest rates) may play out in the Turkish market. (Emlak Post)
