It seems North Texas apartment renters were all set this Summer — either passing on new leases or doubling up to save money, a new study says.
Apartment demand in North Texas reportedly plunged in the third quarter, the Dallas Morning News reported. While the summertime is typically a strong period for apartment leasing, this year net leasing declined by more than 5,000 units in the three-month period. Mesquite, Rockwall, Ellis County and East Fort Worth reportedly had the biggest drops.
“We saw a big momentum shift in the last quarter all across the country, including in North Texas,” said economist Jay Parsons. Parson’s research firm RealPage reports that this past quarter saw the first such dip in demand for apartments in the DFW metroplex in over five years.
“There’s a natural inclination to blame affordability, but it’s not that clear-cut,” Parsons said. Despite marginally higher incomes in the region, demand softened for apartments “at all price points,” he says. Parsons said rents in the area are not yet falling, “but the DFW market — like the rest of the country — did see a significant shift in momentum.”
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Meanwhile, DFW leads the nation in apartment construction and the top developers in the area are announcing new projects every week. At the end of the third quarter, a record 63,562 North Texas apartments were being built.
When you combine the decline in leasing with the 5,871 new apartments delivered to the market in the third quarter, you get an overall vacancy of 5.4 percent. Less than 3 percent of DFW apartments were empty this time last year.
For demand and occupancy to bounce back, the region would need to maintain its migration numbers. DFW grew by almost 100,000 people last year, the most of any U.S. metro area.
“DFW’s job market remains very strong and that’s a big tailwind,” he said. “If jobs and wages continue to hold up as they have and inflation cools to some degree, we should see pent-up rental demand unlocked ahead of the spring 2023 leasing season.”
— Maddy Sperling