April Sent a Mix of Signals, Not a Shift in Direction
The Fed held, private credit kept repricing, apartment rent growth stayed positive but soft, and the picture around multifamily distress grew more complicated. Here’s what stood out to us in April—and how we’re underwriting it.
April was the kind of month that rewards patience over conviction-by-narrative. None of the headline data points moved decisively. The Fed didn’t cut. Private credit didn’t break. Rents didn’t crater. But under each of those calm surfaces, the composition of risk and opportunity shifted in ways that matter for how capital should be deployed over the next twelve months.
The Fed Is Still Waiting—and Increasingly Divided
The Federal Reserve held the target range at 3.50%–3.75% on April 29, citing elevated inflation, rising global energy prices, and uncertainty tied to the Iran conflict. The vote produced four dissents[1]: Stephen Miran preferred a cut, while Beth Hammack, Neel Kashkari, and Lorie Logan opposed the statement’s easing-bias language and would have preferred to drop it. That’s the most divided FOMC meeting since October 1992[2], and a notable bookend to Chair Powell’s tenure of consensus-building.
Markets are now pricing roughly a 79% probability of no change through year-end. On May 4, Barclays joined a growing list of banks abandoning their 2026 cut forecasts[3], now expecting a single 25 bp reduction in March 2027. The shift reflects an updated oil baseline (Brent peaking near $115 this quarter), core PCE running above 3% through year-end, and a labor market that has not loosened the way most forecasters expected six months ago.
A business plan that only works at lower rates is a macro bet. We’re not in the macro-betting business. Deals need to work at today’s debt costs.
This matters for our underwriting because at the start of the year, many sponsors were still penciling some degree of rate relief into their models. April made that harder to defend. The four-dissent print, in particular, is a signal worth taking seriously: a divided FOMC is a slower FOMC, and slower means the cost of capital we see today is closer to the cost of capital we’ll be refinancing into than the consensus assumed even ninety days ago.
Private Credit Is Repricing
Private credit did not break in April, but the easy-liquidity phase is clearly over.
Reuters reported on May 4[4] that some borrowers are migrating back to broadly syndicated loans, because risky loans now price roughly 200 basis points cheaper when syndicated than in direct lending. Direct lending spreads have widened to 550–600 bps over SOFR, while public ‘junk’ loan spreads have averaged 350–400 bps. At least four deals worth $4.3 billion have already moved from direct lending to syndicated execution this year, and direct lending deal counts dropped to 104 in Q1 from 216 a year earlier (Preqin).
This matters for multifamily even when the loans involved aren’t apartment loans. Private credit has become a major source of flexible capital across the broader system—preferred equity, rescue capital, bridge financing, gap funding on stalled construction. When it tightens, the effects show up in refinancing options, recap pricing, and buyer confidence. Capital is still available; it is just more discriminating. That favors sponsors who can move with clarity, bring credible equity, and underwrite conservatively. It also widens the gap between sponsors who built relationships with disciplined capital partners during the easy years and those who didn’t.
Distress Is Broadening—and Becoming More Diagnostic
For the past two years, the dominant multifamily distress narrative was higher rates plus looming maturities. March data added a layer.
Trepp data via Multifamily Dive showed the multifamily CMBS delinquency rate rose 30 bps month over month to 7.15%[5], surpassing the prior October 2025 high of 7.12%. One year earlier, the rate was 5.44%. Two years earlier, it was 1.84%. The CMBS multifamily special servicing rate climbed 45 bps to 8.75%.
The important nuance, per Trepp: most of the new delinquencies were term defaults (failure to pay debt service) rather than maturity defaults (failure to repay the loan balance when due), with roughly 80% of the new distress concentrated in just two markets—NY/NJ and Houston. That’s diagnostically different from the 2023–2024 distress wave. It points to expense growth, weak rent momentum, property-level execution issues, and capital structures too tight to absorb volatility—all of which surface well before any refinance event arrives.
The cleanest opportunities will be assets where the distress is capital-structure driven and the underlying housing demand remains intact.
This sharpens our acquisitions strategy in two directions. First, we are paying closer attention to operating metrics—delinquency rates, trade-out velocity, expense ratios—earlier in diligence than we did even a year ago, because they predict the next wave of distress better than the loan tape does. Second, we are increasingly willing to underwrite assets in markets that don’t show up in the Sun Belt distress stories at all, because that’s where the term-default risk is concentrated and where mispricing is most likely.
Fundamentals Are Stable but Uneven
Rent growth has stabilized, but the spring leasing season is not delivering its usual lift.
Apartments.com reported[6] that national apartment rents rose 0.2% month over month in April to $1,730, the fifth consecutive month of positive growth. Annual rent growth eased to 0.5%—the weakest spring leasing-season performance since 2014, excluding the pandemic year of 2020.
The regional split remained pronounced. The Midwest led at +2.0% YoY, followed by the Northeast (+1.1%) and Pacific (+1.0%). Rents fell in the South (−1.1%) and the Mountain region (−1.9%). At the metro level, Austin (−4.1%), Denver (−3.3%), and San Antonio (−3.1%) continued to lag, while San Francisco led at +7.3% and Chicago posted +2.9%.
Demand is not the issue. Renters are renting. The pressure is supply and price sensitivity, both concentrated in identifiable geographies. The headline national number obscures real differences between oversupplied Sun Belt metros and the more balanced Midwest markets where we have built conviction. For underwriting purposes, the rent-growth assumption that gets a deal to clear should look very different in Indianapolis than it does in Austin—and any model that doesn’t reflect that gap is mispricing risk.
Starts Bounced. Permits Pulled Back.
The Census Bureau and HUD reported on April 29 that multifamily housing starts climbed 9.6% month over month to 446,000 units in March[7], up 13.5% year over year. Multifamily permits told a different story, falling 23.5% to 427,000 units, down 5.3% year over year. Overall housing permits dropped 10.8%.
Starts are noisy month to month—they reflect what was financed and underwritten months or quarters earlier. Permits are usually the cleaner forward signal, and the April release still supports the broader view that the next wave of new supply is meaningfully slowing. That doesn’t translate into a clean “buy multifamily because supply is falling” thesis, however. Certain markets remain oversupplied from projects already delivered or under construction, and the rent-growth data confirms which ones. The real work is submarket-specific: identifying where today’s supply pressure is manageable, where tomorrow’s pipeline is already thinning, and where the gap between those two creates an asymmetric setup.
Liquidity Is Returning, Selectively
The transaction market is thawing in pockets rather than across the board.
MSCI Real Assets data via Multifamily Dive showed Q1 apartment sales rose 1% year over year to $32 billion[8]. Prices were essentially flat—the first quarter without a decline since late 2022. Cap rates rose 10 bps year over year to 5.8%. Individual asset sales rose 3% to $27.6 billion, while portfolio sales fell 13% to $4.4 billion.
The bifurcation was stark. Major-metro sales rose 29% year over year. Non-major metros declined 9%. Mid- and high-rise trades in non-major markets dropped 26% to $5.8 billion. Read together, that’s a transaction market where institutional capital is re-engaging in markets it already knew well, and largely sitting out everywhere else.
Apartments remain among the most liquid segments of commercial real estate, but buyers are still cautious, financing is still expensive, and liquidity is concentrating where investors have stronger conviction. That rewards patient, granular work, market by market, building by building.
Closing Thought
April’s message was that 2026 is becoming more selective rather than easier. The Fed remains cautious. Credit is still repricing. Fundamentals are stable but uneven. Distress is rising in concentrated pockets. Transaction liquidity is returning only where conviction exists.
Our approach hasn’t changed. We underwrite to today’s capital costs rather than theoretical future cuts. We select markets for supply moderation, durable renter demand, and operating resilience. We look for situations where stress is capital-structure driven rather than fundamentals-driven. And we treat operational execution and basis discipline as the primary path to value creation and downside protection.
This cycle will produce attractive opportunities. They will be specific: fundamentally sound assets, pressured capital structures, disciplined basis, and business plans that work without the macro environment doing the heavy lifting.
As always, please reach out with questions or to discuss what we are seeing in our active markets.
Will Thompson
Founder & CEO, Oakdale Capital
Sources
Bloomberg, “Fed Dissents: Why 4 Officials Voted Against FOMC Decision,” April 29, 2026. bloomberg.com
CNBC, “Fed interest rate decision April 2026: Fed holds rates steady amid dissent,” April 29, 2026. cnbc.com
Yahoo Finance / Investing.com, “Barclays pivots, says no Fed rate cuts in 2026,” May 4, 2026. finance.yahoo.com
Reuters via Investing.com, “Cost gap drives some US borrowers from private credit to bank-led syndicated loans,” May 4, 2026. investing.com
Multifamily Dive, “Multifamily delinquencies jumped 30 bps in March, as property-level fundamentals deteriorate: Trepp,” April 2026. multifamilydive.com
Apartments.com, “Apartments.com Rent Report for April 2026,” May 2026. apartments.com
Multifamily Dive, “Multifamily housing starts rose in March, but permits fell,” April 29, 2026. multifamilydive.com — primary source: U.S. Census Bureau / HUD.
Multifamily Dive, “Apartment sales ticked up 1% in Q1,” April 2026 — MSCI Real Assets data. multifamilydive.com
