Big Supply Holds Rents Down Across Texas Apartment Markets

Despite staggering absorption volumes, massive amounts of supply in Texas apartment markets have held pricing power down in the year-ending 1st quarter. The Lone Star State added 115,000 new apartments in the past year, accounting for 18% of the national total.  Texas also captured robust apartment demand, leading the nation in total units absorbed in the past year. But even strong demand couldn’t keep up with surging supply, leaving Texas occupancy rates below historic norms. As a result, Texas saw the nation’s deepest rent dive, with prices falling 2.4% in the year-ending 1st quarter. Annual rent declines were also notable in the Desert/Mountains region (-2%) as well as in Florida (-1.8%), the Carolinas (-1.5%) and the Southeast (-1.3%). Alternatively, the Midwest, Mid-Atlantic and Northeast markets, which have seen relatively low to normal supply levels in recent years, continue to see rents increase at a slow and steady pace between 2% and 3% annually.

For more information on apartment markets across Texas, including forecasts, watch the webcast Market Intelligence: Q2 Texas Update.