Greater Dallas Multifamily Performance Strong at Mid-Year

Greater Dallas Multifamily Performance Strong at Mid-Year

Multifamily performance through the halfway point of the year was exactly what was needed for a market that had been struggling under the weight of elevated deliveries and inconsistent demand.

New supply receded some from last year’s peak, apartment demand grew considerably, and average occupancy gained ground for the first time since 2021. Rent growth notably improved compared to the last couple of years and the expansion of lease concessions finally leveled off.

All numbers will refer to conventional properties of at least fifty units.

Supply and Demand Balance Returned

About 8,700 new units were delivered across Greater Dallas in the first half of the year. This was down by approximately 2,000 units from last year but remained at the high end of the range established over the last handful of years.

This decline in new supply should continue through the rest of the year and provide some breathing room for a market that has dealt with a seemingly endless deluge of new units in recent years.

Alongside a slowdown in supply, apartment demand bounced back in a major way. After moderate year-over-year improvement from 2023 to 2024, net absorption in the first half of this year more than doubled last year’s total. Just over 9,800 net units were absorbed through June – the highest for the period since 2021.

Thanks to the renewed balance between supply and demand, Greater Dallas average occupancy improved in the period for the first time since 2021. A 0.4% increase brought the market average to just under 88%. Much work remains to be done, but a stop to the bleeding was step one.

The Rent Growth Picture Brightened

Not only did market conditions improve across the board in terms of demand and occupancy, but that improvement was accompanied by stronger rent growth. Rent performance generally lags demand, so the strong demand from recent months should continue to fuel rent growth through the summer.

The average effective rent for new leases rose 1.1% through June to $1,571 per month. As was the case with net absorption and occupancy, the result was the strongest for this portion of the calendar since 2021.

Changes in the lease concession environment aided effective rent growth. The availability of discounts rose once again in the period, but only by 11%. This was roughly equal to the increase from the same portion of 2024 and a far cry from the nearly 40% surge from the first half of 2023.

While the pace of concession availability slowed, the average discount value growth also moderated. The average concession value rose by 8% to about four weeks off an annual lease. This was notably smaller than last year’s 21% increase in the same period.

Takeaways

2025 has gotten off to an encouraging start for Greater Dallas multifamily. The supply- and demand relationship has started to rebalance. That has allowed average occupancy to begin its recovery and has helped rent growth to reemerge from its two-year hibernation.

For readers of the January Rooflines issue, this may all sound familiar. With the remainder of the summer ahead, the next few months should see momentum continue.

*Jordan Brooks is a Senior Market Analyst at ALN Apartment Data. https://www.alndata.com

ALN is the largest collector of apartment data in the United States. We update property-level information monthly, reporting on properties nationwide, and provide our clients with data analytics, new construction projects, histories, occupancy and rental trend reports, contact databases and locating services.