DALLAS — North Texas apartment construction surged to a new high in the early months of 2023.
At the same time, average apartment rents in Dallas-Fort Worth declined slightly in the first quarter.
More than 74,000 apartments were being built in the area at the end of the quarter — up from 65,462 units at the end of 2022, according to the latest estimate from analysts at RealPage. North Texas apartment building has more than doubled since 2015.
“It’s the biggest construction number since we’ve tracked it starting in 1992,” said RealPage chief economist Jay Parsons.
Net apartment leasing in D-FW rose by 857 units, which was the best performance since a year earlier.
“After an uncharacteristically slow 2022, leasing momentum returned to the D-FW apartment market in the first quarter,” Parsons said. “We’re seeing strong leasing traffic again as renters suddenly have far more options than they did a year ago — both in terms of newly built and also existing apartments.”
While apartment leasing has picked up, it hasn’t resulted in substantially higher rents.
With an average in North Texas of $1,536, rents declined by 0.4% in the first quarter.
“Rents were up 4.4% year-over-year, the lowest (annual increase) since April 2021,” Parsons said. “Last year at this time, rent increases hit the peak of 18.5%. More supply is doing its job with rents, as rent growth levels have cooled off dramatically since peaking one year ago. And there’s a lot more new supply coming.”
Parsons said D-FW leads the country in apartment development, with 34,345 units scheduled to complete in 2023.
Forecasts of a drop in apartment starts so far haven’t come true.
With the increase in construction, North Texas apartment vacancies now top 6.5% — the highest since 2012, according to RealPage.
D-FW’s rental market is being supported by continued population gains and employment growth in the area. North Texas gained 211,600 jobs in the year ending in February, the latest estimates show.
The apartment market is also getting a boost from a decline in the number of first-time buyers who are able to acquire a home and instead continue to rent.
