Is supercharged apartment construction in Dallas-Fort Worth heading to a slowdown?

The slowdown in local permits for new multifamily residential projects comes as the nationwide apartment building market is at a record rate of production.

Almost 444,000 rental units were completed nationwide in 2023 – the largest number of new apartments added in 36 years, according to analysts at Richardson-based RealPage.

“High supply is great news for renters and a hurdle for investors,” RealPage chief economist Jay Parsons said in the report. “Renters suddenly have far more options than they’ve had in recent years, and that’s putting downward pressure on rent growth.”

Another 671,000 U.S. apartment units are scheduled to complete in 2024, after which new supply should begin to wane, RealPage predicts.

Higher mortgage rates and tougher lending standards are making it harder for apartment builders to obtain funding for new projects.

Dallas-Fort Worth has led the country in apartment building for several years with more than 70,000 units under construction. But there are indications the D-FW building binge has peaked.

Dallas-area multifamily building permits were down almost 11% for the year ending in November, according to RealPage. And nationwide apartment building permits fell by more than 21% year-over-year.

Apartment construction is slowing in many markets as rents are under pressure from thousands of new units opening their doors.

“It’s all about supply,” Parsons said. “Apartment construction is at generational highs.

“It’s not a demand issue,” he said. “Rents are falling in the markets with the strongest demand because those are the markets seeing multidecade highs in new supply.


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