Street rates in self-storage have been negative every single month so far in 2026. The national year-over-year decline was 0.4% in January, 1.2% in February, and 2% in March, the steepest single-month drop of the year. Every one of Yardi Matrix's top 30 metros posted negative annual growth in March. That is not a localized correction. It is a sector-wide pressure that is now entering its second full year.
Q4 2025 average move-in rates fell to $96.44, down 10.7% year-over-year. The standard 10x10 non-climate-controlled unit averaged $119 per month entering 2026, off 0.8% annually, while climate-controlled units at $134 per month were approximately flat. The gap between what new tenants pay and what existing tenants pay has narrowed to near zero in many markets. That compression removes a key lever operators have historically used to drive revenue.
The question that every operator, analyst, and lender in the space is now asking is the same: when does this turn? The answer is more conditional than most want to hear.
What the Supply Math Actually Says
The supply side of the equation is genuinely improving. Yardi Matrix projects approximately 51.1 million square feet of new self-storage deliveries in 2026, down 7.3% year-over-year. That represents 2.4% of total national stock, well below the 3.0% delivered in 2025 and meaningfully below the long-term average of 4.2%.
The pipeline numbers are even more encouraging. The planned pipeline declined 4.6% quarter-over-quarter and 12.8% year-over-year as of Q4 2025, sitting at 114.1 million net rentable square feet for established markets. The prospective pipeline dropped 6.8% quarter-over-quarter and 21.7% year-over-year, now at 31.5 million square feet, which is down more than 40% from its 2023 peak.
The catch: Yardi revised its supply forecast upward by 6% for 2026 and 4.8% for 2027 after construction starts in the second half of 2025 proved stronger than expected. Supply is contracting, but it is bottoming at a higher level than the optimistic case assumed. The supply tailwind is real; it is just arriving more slowly and from a higher floor.
"New supply will bottom at a higher level than previously anticipated, though the overall forecast continues to show deliveries well below the peaks of the recent development cycle."
- Yardi Matrix, Self-Storage Forecast Update, 2026
What the Housing Market Math Actually Says
This is where the recovery timeline gets complicated. The National Association of Realtors entered 2026 projecting a 14% jump in existing-home sales. That number was cited in virtually every industry outlook published in January and February as the central catalyst for demand recovery. The logic was straightforward: more home sales means more household moves, which means more storage demand, which means more move-in volume, which means upward rate pressure.
That 14% figure is gone. NAR revised its 2026 existing-home sales forecast down to a 4% increase after a lackluster spring. March 2026 delivered 3.98 million existing-home sales at a median price of $408,800 with 4.1 months of inventory. That is not a frozen housing market. It is a slow-motion one, and the difference matters enormously for self-storage.
Mortgage rates have not provided the relief the market expected entering the year. Rising rates, tepid consumer confidence, and persistent affordability constraints have combined to keep the transaction volume that was supposed to drive Q1 and Q2 demand well below what operators priced into their projections. The housing-triggered demand surge that was supposed to carry the spring has not materialized at scale.
What REITs Said in Q1 Earnings
The Q1 2026 REIT results are best described as stable with cautious optimism, not a recovery in progress. Extra Space Storage posted same-store revenue growth of 1.7% and NOI growth of 1.2%, with Core FFO of $2.04 per diluted share, up 2% year-over-year. Public Storage reported Core FFO of $4.22 per share, a 2.4% year-over-year increase. National Storage Affiliates posted Core FFO of $0.57 per share, up 5.6% year-over-year.
CubeSmart's 2026 full-year guidance puts same-store revenue growth between 0.5% and 2.0%. That range tells you what management actually believes: the second half needs to carry more weight than the first, and even the high end of the range is not a strong growth scenario. These are stabilization numbers, not recovery numbers. They are consistent with occupancy holding in the low 90s on a stagnant tenant base rather than on inbound volume.
The REIT sector's relative resilience in Q1 earnings reflects the benefit of long-tenured tenants paying rates set during stronger years. That buffer is not permanent.
The Three Conditions That Need to Align
Based on what supply and demand data are actually showing, three specific conditions need to converge before national street rates post positive year-over-year growth in 2026:
First, mortgage rates need to fall into the low-to-mid 6% range consistently. At current levels, the affordability math for buyers in most major markets keeps would-be sellers locked in. Mortgage lock-in is the primary force suppressing home sales volume, and home sales volume is the primary demand driver for self-storage. A sustained move to the low 6s does not need to happen by June to matter for the sector. It needs to happen by August for the Q3 and Q4 comps to register.
Second, the Sun Belt inventory overhang needs to clear. Markets like Phoenix, Austin, Dallas, Atlanta, and Charlotte added disproportionate supply during the 2020-2023 development cycle. Street rates in those markets are under the most pressure, and they drag national averages down. As new deliveries slow in those markets through 2026, the absorption rate needs to outpace the remaining supply. That is starting to happen, but it is a quarter-by-quarter process, not a sudden event.
Third, the annual comp base needs to work in the sector's favor. Street rates were already declining in H2 2025. As 2026 progresses, the year-over-year comparison becomes easier simply because the 2025 baseline was weak. By Q3 2026, operators will be comping against quarters where rates were already negative. That mechanical tailwind alone can move national averages from negative 2% to flat or slightly positive without any real underlying improvement in demand.
What Operators Can Do While Waiting
Rate recovery is a macro outcome. Operators cannot control when housing markets unfreeze or when the Fed moves rates. What they can control is the revenue structure inside their own portfolio while the external conditions resolve.
Operators with meaningful existing-tenant rate increases (ETRIs) built into their systems have a buffer the new-move-in market is not providing. Tenants who entered units at 2024 or early 2025 rates are often still paying above current street rates. Managing ETRI cadence carefully, raising at the right interval on the right tenant segments, can sustain NOI even when new move-in rates are soft.
Concession management is the other lever. The instinct during a soft rate environment is to offer more concessions to drive occupancy. The operators who come out of this cycle in the best shape are the ones who held concession discipline and protected their achieved rate rather than chasing occupancy with deep discounts that take years to unwind.
The Numbers Worth Writing Down
- National street rates: -0.4% in January, -1.2% in February, -2.0% in March 2026 year-over-year
- Q4 2025 average move-in rate: $96.44, down 10.7% year-over-year
- 10x10 non-climate-controlled: $119/month entering 2026, down 0.8% YoY
- 2026 new supply forecast: 51.1M sq ft, down 7.3% YoY, representing 2.4% of total stock
- Prospective pipeline: 31.5M NRSF, down 40%+ from 2023 peak
- NAR 2026 home sales forecast: revised from 14% to 4% growth
- March 2026 existing-home sales: 3.98M units, $408,800 median, 4.1 months of supply
- Extra Space Q1 2026 same-store revenue: +1.7%; CubeSmart 2026 guidance: +0.5% to +2.0%
The Recovery Is Real. The Timeline Shifted.
The structural case for a self-storage rate recovery in H2 2026 remains intact. Supply is contracting at a meaningful rate, the pipeline is far below its peak, and the sector's fundamentals are healthier than the rate environment implies. None of that changed.
What changed is the timeline. NAR's downgrade of the 2026 home sales forecast removes the demand catalyst that was supposed to drive Q2 move-in volume and pull street rates out of negative territory before summer. The mechanical comp tailwind in H2 is real, and it may be enough to push national averages to flat or slightly positive by Q3. But operators waiting on a broad, housing-driven rate recovery in 2026 are waiting on a housing market that has not yet cooperated.
The operators best positioned for 2026 are the ones who stopped waiting for the macro and built their NOI strategy around the variables they can actually control.
Sources
- U.S. Self Storage Market Steps Cautiously Into 2026, Yardi Matrix Reports, Yardi Matrix
- Self Storage Pipeline Prompts Updated Yardi Matrix Supply Forecast, Yardi Matrix
- NAR Existing-Home Sales Report Shows 3.6% Decrease in March, National Association of Realtors
- Lackluster Beginning to Spring Homebuying Season, with NAR Downgrading 2026 Forecast, The National Desk
- Self-Storage REITs See Signs of Stabilizing Fundamentals, Supply Expected to Moderate, Nareit
- Self-Storage REITs Release Financial Results for Q1 2026, Inside Self-Storage
- 2026 Self-Storage Forecast: Soft Fundamentals, Strong Liquidity, List Self Storage