Texas Housing Market Sees Surge in New Apartments Being Built

The U.S. is set to add a record number of new apartments this year as a total of 518,108 rental units are expected to be completed before 2025, according to a recent study by RentCafe.

That total marks a 9 percent increase over 2023 and a 30 percent increase over two years ago.

Texas is leading the way in the construction, with four of its cities sitting in the top 20 U.S. metropolitan areas for new apartments built this year—including two of the top three. New York City took the number one spot as the metro set to build the highest number of new apartments this year, for a total of 32,932 new rentals. Dallas followed with a very close 32,932 new apartments expected to be completed by the end of the year.

The former pandemic boomtown of Austin, Texas, took the third spot with a total of 21,506 new rentals on course to be completed before 2025. The two Texas cities together are expected to build roughly 10 percent of all apartments completed nationwide by the end of December.

The numbers were compiled by RentCafe using data from its sister company Yardi Matrix.

Texas is building a large number of new apartments because demand for them “remains robust due to factors like corporate migration and high home prices,” said Doug Ressler, senior analyst and manager of business intelligence at Yardi Matrix, in a press release. Other markets in the country, on the other hand, “are seeing a slowdown in new construction starts due to the economic environment,” he added.

Dallas’ population has been consistently growing even after the pandemic, which attracted a flow of workers moving in from out of state. Between July 2022 and July 2023, the metro added more than 150,000 new residents thanks to “its business-friendly environment; affordability compared to similar-sized metros; and good infrastructure keep attracting companies and construction projects,” RentCafe writes.

“Naturally, corporate relocations create jobs and boost wages throughout the metroplex, further fueling economic growth and attracting newcomers who need housing,” the report reads.

Austin, despite its recent boom-and-bust, is still the second fastest-growing metro in the country thanks to its “strong job market and opportunities in tech, healthcare, and hospitality,” the RentCafe report reads. On top of that, despite rising prices, apartments in the Texas capital are still more affordable than in other cities like San Francisco and New York.

The U.S. housing market is facing a historic shortage of homes after the country chronically underbuilt in the years following the financial crisis of 2007-2008. This lack of supply contributed to inflating housing prices during the pandemic, when demand was high and mortgage rates relatively low, and the rates remained high even when demand started to dwindle amid skyrocketing mortgage rates in 2022-2023.

While housing inventory has grown across the country in the past few months, especially in states like Florida and Texas, the national market remains significantly undersupplied compared to existing demand. As of July, according to Redfin’s latest data, the total number of homes for sale, seasonally adjusted, was 1,635,395—down 0.6 percent from June but up 13.7 percent compared to a year earlier.

In the same months, the country counted 494,500 new listings, unchanged from a month earlier but up 2.9 percent year-over-year. The national housing market had 2.6 months of supply—meaning that it would take 2.6 months for all the homes for sale on the market to sell, if no other was added.

Here’s a list of the top 20 U.S. metros which are expected to complete the highest number of new apartments by the end of the year:

1. New York—32,935
2. Dallas—32,932
3. Austin, Texas—21,506
4. Phoenix—20,141
5. Atlanta—18,520
6. Houston—18,301
7. Washington, D.C.—15,079
8. Charlotte—14,658
9. Miami—14,177
10. Denver—12,913
11. Nashville—12,192
12. Seattle—11,842
13. Tampa, Florida—11,111
14. Orlando, Florida—10,732
15. San Antonio—9,617
16. Raleigh, North Carolina—9,228
17. Los Angeles—8,924
18. Minneapolis—8,840
19. Boston—8,022
20. Portland, Oregon—7,499