Residential REITs are heading into the first-quarter 2026 reporting season with a steadier backdrop than they faced a year ago. Labor markets are still creating enough jobs to support household formation, and investors are watching for signs that apartment fundamentals are finally moving past the worst of the supply wave. This does not mean the setup is easy. Property owners are still balancing softer pricing power, elevated concessions and a renter base that remains value-conscious. 

This makes the upcoming reports from AvalonBay Communities (AVB Quick QuoteAVB - Free Report) , Equity Residential (EQR Quick QuoteEQR - Free Report) , Essex Property Trust (ESS Quick QuoteESS - Free Report) and UDR Inc. (UDR Quick QuoteUDR - Free Report) especially important. Together, these companies offer a broad read on the apartment market, spanning dense coastal regions, suburban infill markets and key Sun Belt territories. 

Their results should help investors judge whether improving demand is becoming strong enough to push through the drag from concessions and lingering new supply pressure. In other words, this group should highlight a useful first look at how apartment owners are really starting 2026.

One-Month Price Performance

Image Source: Zacks Investment Research

Demand Is Rebounding, Supply Is No Longer Worsening

The early read from the broader apartment market is encouraging. RealPage report noted that the U.S. absorbed nearly 93,300 units in the first quarter, one of the strongest first-quarter demand readings of the past decade. That was a notable turnaround from the net move-outs seen at the end of 2025. Even so, the annual demand figure of just more than 303,000 units still sits below the decade average, which says recovery is underway but not yet strong enough to declare a full return to normal leasing conditions. 

Just as important, supply is no longer worsening. RealPage estimated that roughly 367,000 units were completed in the year-ending first quarter, including about 75,200 units during the quarter itself. This was the fifth straight quarter of declining annual supply after deliveries peaked above 589,000 units in late 2024. For apartment landlords, this is a meaningful shift. It suggests the industry is gradually moving away from peak competitive pressure, even though a large amount of recently delivered products is still being leased up across many markets. 

Tension between better demand and still-heavy competition is showing up in rents and occupancy. RealPage said that apartment occupancy was 94.9% in the first quarter, up 10 basis points from the prior quarter but still below the year-ago level. Effective asking rents rose 0.4% after two quarterly declines, yet it remained 0.5% below the prior-year mark. Concessions also stayed widespread, with 25.5% of apartments offering them and the average concession at 7.2%, showing that owners are still leaning on incentives to protect occupancy. 

The weakest rent trends remain in high-supply Sun Belt markets. Austin, Denver and Phoenix posted some of the deepest annual rent cuts, while San Antonio, Tampa, FL, Nashville, TN, and Las Vegas also lost momentum. In contrast, San Francisco, San Jose, CA, and New York showed rent growth, helped by easing supply pressure and better demand. Several Midwest markets, including Chicago, St. Louis, MO, and Cleveland, OH, also posted steady gains because new supply has been more limited.

How Are Residential REITs Placed Ahead of Q1 Earnings?

AvalonBay Communities: AVB has established itself as a leading player in the residential REIT sector, with a strong portfolio of high-quality apartment communities. The company's geographic diversification, focus on both suburban and urban properties and disciplined capital allocation have positioned it favorably. 

AvalonBay appears positioned to report a quarter defined more by steady execution than breakout growth. In its late-February business update, the company said that portfolio physical occupancy increased 20 basis points from December to February. It also said that like-term effective rent change improved by 100 basis points, moving from a 0.5% decline in January to a 0.5% gain in February.

AvalonBay is set to announce its first-quarter 2026 earnings on April 27, after market close. The Zacks Consensus Estimate of $770.57 million for first-quarter revenues indicates a 3.31% year-over-year increase. However, the Zacks Consensus Estimate for the quarterly core FFO per share has been revised 3 cents south to $2.80 over the past two months. It implies a year-over-year decline of 1.06%. (Read more: What to Expect From AvalonBay Communities Stock in Q1 Earnings?)

AVB carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Equity Residential: EQR boasts a portfolio of high-quality apartment units in some of the key markets of the United States with an affluent tenant base. It has an established presence in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin.

Equity Residential entered first-quarter 2026 with solid fundamentals, including 96.5% occupancy in late February, improving December-January pricing and declining concessions. EQR expects apartment supply in its markets to drop 35% in 2026, with greater second-half benefits. Strong retention, low turnover and renewal increases near 4.5% should support high occupancy. The quarter likely marked a steady start, with stronger momentum building later. 

Equity Residential is slated to report first-quarter 2026 results after the closing bell on April 28. Currently, the Zacks Consensus Estimate for the company’s quarterly revenues stands at $782.5 million, which indicates a 2.86% increase year over year. For the first quarter of 2026, the company projected normalized FFO per share in the band of 94-98 cents. The consensus mark for quarterly normalized FFO per share is pegged at 96 cents, suggesting 1.05% year-over-year growth. EQR currently has a Zacks Rank of 3. (Read more: What's in Store for Equity Residential Stock in Q1 Earnings?)

Essex Property Trust: This residential REIT’s substantial exposure to the West Coast market has offered ample scope to enhance its top line. The West Coast is home to several innovation and technology companies that drive job creation and income growth. This region has higher median household incomes, an increased percentage of renters than owners and favorable demographics. Due to the high cost of homeownership, the transition from renter to homeowner is difficult, making renting apartment units a more flexible and viable option.

Essex Property Trust entered first-quarter 2026 with steady fundamentals, supported by improving West Coast trends and easing supply. Management expects demand to remain stable, with new housing supply across its markets down about 20% this year. February and March renewals tracked in the low to mid-4% range. Northern California continues recovering, Los Angeles is stabilizing, and Seattle should benefit from lower supply and return-to-office trends.

Essex Property Trust is scheduled to report its first-quarter 2026 results on April 28, after market close. The Zacks Consensus Estimate of $480.63 million for first-quarter revenues calls for a 3.46% increase year over year. For first-quarter 2026, Essex Property projected core FFO per share in the range of $3.89-$4.01, with the midpoint being $3.95. The consensus mark for quarterly core FFO per share has remained unrevised in the past month at $3.96. It indicates a year-over-year marginal decline of 0.25%. ESS has a Zacks Rank of 3. (Read more: Essex Property to Report Q1 Earnings: Here's What to Expect)

UDR: This residential REIT stands in a strong position to capitalize on its well-diversified portfolio, which includes a balanced mix of high-quality Class A and B properties across coastal and Sunbelt markets. Steady rental housing demand in these regions, supported by favorable demographic shifts, should work to its advantage. The company’s use of technology to streamline operations and boost margins strengthens its long-term growth outlook.

UDR’s March presentation projected first-quarter blended lease growth of 1.5%-2% for the first quarter, about double last year, with renewal growth above 5% and offers at 5%-6%. Occupancy held in the mid-96% range, concessions eased, and turnover fell 200 basis points through Feb. 9. San Francisco, New York and Dallas outperformed, supporting modest same-store revenue growth.

The Zacks Consensus Estimate for quarterly revenues is currently pegged at $427.13 million. This indicates a 1.74% year-over-year rise. UDR expected first-quarter 2026 FFO as adjusted per share in the range of 61-63 cents. While the consensus mark for quarterly FFO as adjusted per share has remained unrevised at 62 cents in the past month, it suggests a 1.64% increase year over year. UDR has a Zacks Rank of 4 (Sell).

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.