Major Texas Markets Trailing National Occupancy Norms

All five of the major Texas apartment markets ranked among the nation’s worst occupancy performers in April – but it’s not as bad as it sounds.

While Texas markets have a reputation for having lots of apartment demand, it’s typical for occupancy in the big five – Houston, Dallas, Austin, San Antonio and Fort Worth – to run behind the national average. Over the course of the past 10 years, occupancy in the largest Texas markets has averaged 94%, 110 basis points (bps) behind the U.S. average of 95.1%.

However, the gap between U.S. and Texas occupancy has widened in recent years. As of April 2021, occupancy in the major Texas markets averaged 93.8%, while the U.S. norm was 200 bps higher at 95.8%.

Part of what holds occupancy down in the big Texas markets is sizable volumes of new apartment supply. In the past 10 years, the average annual inventory growth rate in the U.S. has run at about 1.2%. The big five Texas markets, meanwhile, have seen nearly twice as much growth, with an average annual inventory increase of 2.1%.

In total, the existing unit count in Austin has swelled by about 40% in the past decade. The apartment bases in Dallas and San Antonio have grown by roughly 30%, while the stocks in Houston and Fort Worth are up by roughly 20%. In the U.S. overall, the apartment base has grown by a milder 15.3% in the past 10 years.

The big percentage of increase in each of these markets is especially significant given their sheer size. The largest Texas apartment market, Houston ranks as #4 in the nation for size, behind only New York, Los Angeles and Chicago. The Dallas apartment market is the sixth biggest in the nation, after Washington, DC. Meanwhile, Austin, San Antonio and Fort Worth are about half the size of Houston and Dallas, but these are still sizable apartment stocks in relation to some other big markets in other parts of the U.S.

While occupancy in the major Texas markets is trailing national norms, however, rates are not terrible when compared to the five-year averages for these areas.


Houston was the worst occupancy performer among the nation’s largest 50 apartment markets in April, with a rate of just 92.9%. However, this rate is not too far off the market’s decade average of 93.2% and actually improved by 40 bps in April.

Houston’s energy-dependent economy was deeply impacted by the COVID-19 pandemic, as oil prices plummeted under the weight of global travel restrictions. With the vaccine rollout, travel has opened up again to some extent and oil prices got back on track recently, helping the Houston job base recover some of its previous losses. However, employment totals here are still 6% below pre-pandemic levels, falling short of the recoveries in the rest of the major Texas markets, which benefit from more diverse economic scopes.

At the same time the economy in Houston took a hit, new apartment development also ramped up. Houston led the nation for apartment supply in the past year, with deliveries of over 20,500 units, creating competition for the market’s stock of Class A units. Apartment demand couldn’t keep up with nation-leading completion volumes in the past year, pulling occupancy in Houston down.

San Antonio

San Antonio logged the third-worst performance in the U.S., with occupancy of 93.4% nestled between the showings in the pandemic-era cautionary tales of San Francisco and San Jose. San Antonio is generally a consistent performer, with demand typically running right alongside supply volumes. This latest occupancy rate is up 30 bps year-over-year and matches the market’s five-year average. Even with completions in this market ramping up in the past decade, increasing the existing base by nearly one-third, San Antonio has managed to absorb quite a bit of it.

As an active demand driver, the employment base in San Antonio was only 2.3% away from full recovery as of March, making it one of the most recovered in the nation. Salt Lake City has already recovered all the jobs lost during the recession, while the employment bases in Austin and Jacksonville are also roughly 2% away from pre-pandemic levels. Cushioning San Antonio from the harder blows of the recent recession were a high concentration of jobs in the government, military and medical fields.


Austin and Dallas tied with occupancy of 94.3% in April, the fifth-worst showing among the nation’s largest 50 apartment markets. Austin’s occupancy rate was down 30 bps from the year-earlier reading but has improved notably since bottoming out at 93.6% in January. Today’s showing is only a few ticks behind the market’s five-year average of 94.6%.

Just to keep it weird, occupancy is very tightly knit across all product spectrums, which are all around the 94% mark, even though nearly 30% of Austin’s existing product base has been built just in the past 10 years. Austin saw a demand spike in 1st quarter, with the market’s absorption ranking as one of the nation’s strongest showings and making up for some lagging performances from earlier in the pandemic. Additionally, this is the most recovered workforce in Texas, with an employment base only 1.7% away from pre-pandemic volumes.


Dallas occupancy of 93.9% in April was below the market’s five-year average of 94.6%. While the decline in the past year was mild at 10 bps, the downturn since the market’s recent peak in August 2019 was much deeper at nearly 200 bps.

Contributing to the recent occupancy decline in Dallas was a big block of new apartment supply. This market has been a national leader for new completions in the past decade, and demand had – for the most part – been keeping up until the COVID-19 pandemic damaged that progress a little. The Dallas economy is recovering nicely, however, with a workforce that is only 2.8% away from pre-pandemic norms.

Fort Worth

Fort Worth was the best-performing major market in Texas, with occupancy at 94.7% in March, a showing that tied with Seattle as the eighth worst in the nation. Fort Worth’s latest occupancy showing is essentially in line with the market’s five-year norm of 94.8%. Occupancy has held up relatively well here during the pandemic, with today’s rate coming in 40 bps ahead of the showing from one year ago. The market managed this performance even with an employment count that is 3.6% away from full recovery.

New apartment deliveries started ramping up in Fort Worth in 2018 and have remained elevated since. However, the market has absorbed those increased completions relatively well, generally keeping pace with supply. In the past year, specifically, Fort Worth absorbed over 6,600 units, which is roughly double this market’s decade average. Concurrent supply, however, was slightly bigger, near 7,000 units, also twice its normal pace.