Some price relief appears to be on the way for renters in Dallas-Fort Worth. An explosion of new apartments in the area should help drive down increases in rental rates, according to a real estate analyst.
As of February 21, there were 37,547 apartment units under construction throughout the region, says David Kahn, senior market analyst in DFW for CoStar Group, the parent company of Apartments.com. Among U.S. metro areas, Dallas-Fort Worth ranks second, behind New York City, for the number of apartment units currently being built, Apartments.com data shows.
Not only will the surge in apartment construction mean more choices and more amenities for area renters, but it also will bring some downward pressure on rental rates, according to Kahn. That’s thanks to the stepped-up competition that existing apartments will be facing from new apartments.
Already, growth in DFW rental rates has slowed from about 6 percent in 2015 to 4 percent in 2016, and just under 3 percent in 2017, Kahn says. He expects growth in rental rates to continue declining, especially since a number of local apartment projects in the pipeline haven’t even broken ground yet.
“I wouldn’t say there is an apartment shortage in DFW,” Kahn says. “But in terms of overall housing, since we are building single-family homes at a much lower rate than we have previously and single-family home prices are rising faster than multifamily rents, that pushes many people that would normally buy homes into the renter pool, at least temporarily.”
The demand for more apartments in Dallas-Fort Worth has been driven in large part by the addition of more than 100,000 jobs in the region since 2013, Kahn says. The number of apartment units under construction now in the area represents about 5.5 percent of the existing supply, which Kahn says isn’t an abnormally high percentage.
Kahn says the sections of DFW seeing the most apartment construction include Uptown, Knox-Henderson, East Dallas, West Dallas/Design District, and Northwest Dallas/Medical District, along with Allen, Frisco, McKinney, Plano, and the Addison/Carrollton/Farmers Branch tollway corridor.