Apartment rents in Dallas-Fort Worth have stabilized after skyrocketing last year.
The rental growth rate in DFW was 0.3 percent year-over-year as of May, compared to double digit increases in 2022, the Dallas Business Journal reported, citing ApartmentData.com.
Why have rental rates tapered? As DFW’s population and home sales prices surged throughout the pandemic, demand for apartments was sky-high, allowing landlords to charge more.
The region was No. 1 in the nation for population growth in 2021, adding about 97,000 new residents. To accommodate them, developers started construction projects faster than a dog with a bone. A record number of new apartments are under construction in DFW, with over 74,000 units in the pipeline by the end of March. The rental market is more balanced now as a result of the added supply.
However, many multifamily developers have hit pause on their projects amid high interest rates, rising construction costs, banking failures and fears of a recession. Thus, leasing and development activity has cooled across the region and most of the nation.
“We’ve entered this new phase of things,” John Griggs, co-CEO of Dallas-based multifamily developer Presidium, told the outlet. “It’s just a lot harder to get transactions done. There’s no question about it.”
DFW’s multifamily sector remains relatively strong, though. The region leads all major Texas markets in apartment occupancy at 91.6 percent. That’s down slightly from 93 percent one year ago.
Houston’s occupancy rate is at 89.9 percent, Austin is at 89.1 percent and San Antonio is at 89.4 percent, the outlet reported. Houston has also seen an increase in rental growth rate with a 1.8 percent jump year-over-year, while Austin’s fell by 2.7 percent.
—Quinn Donoghue
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