South Central Region Still Impacted by Big Supply, Especially in Some Submarkets

The South Central region apartment story remains firmly rooted in supply. More than 500,000 new units have delivered this cycle, with volumes peaking in late 2023 and early 2024, reshaping conditions across Texas and surrounding states. While markets like Dallas, Austin and Houston have captured the bulk of new deliveries, that supply is highly concentrated in specific pockets. Top submarkets for new supply this cycle have been Allen/McKinney and Frisco in the Dallas market, as well as East Austin and Round Rock/Georgetown in the Austin market. Despite an emerging slowdown in deliveries, especially in Austin and Dallas, the South Central region continues to absorb a large pipeline. That persistent influx of new supply remains a drag on performance. Rent cuts, elevated concessions and below-average occupancy are common across major metros, particularly in high-growth nodes. Still, the narrative is beginning to shift. Construction starts have slowed considerably, and units underway largely represent the tail end of the cycle rather than a new wave. The takeaway: Conditions remain soft today but improving supply fundamentals are laying the groundwork for recovery into 2027.

For more information on the state of South Central apartment markets, including forecasts, watch the webcast Market Intelligence: South Central Q2 Update.