Nationwide rent growth is cooling down for the season, after a substantial post-pandemic hike. Yet DFW’s rates are behind the national and one report estimates current conditions could lead to a new spike in the rental market.
According to a recent report by Apartment List, an online marketplace for apartment listings, September saw a decrease in rents of 0.2%. That’s the first time this year the national median rent has declined month-over-month. This dip is consistent with pre-pandemic seasonal trends and could mean further decreases as we enter winter. At a national level, year-over-year growth is decelerating, from 18% at the beginning of 2022 to 7.5% in October.
But if we look into the DFW area, rents declined only 0.1% over the past month and the year-over-year growth is 12.3%, well above the 8.3% state average. Although this might sound alarming, the report pointed out that, while Dallas rent rose in the past year, it still has lower prices than other large cities. Dallas’ median two-bedroom apartment rent sits at $1,487 ($127 over the national average) while San Francisco’s almost doubles it at $2,673.
Taking a closer look at the area you’ll find that McKinney saw the biggest drop in rents in the metro with a 1.6% decline, but Arlington takes the prize for least expensive rent with the two-bedroom median around $1,337, even after a 0.7% increase over the last month. The most expensive rents can be found in Plano, where the same median sits at $2,010.
As for the future of the rental market, the real estate data firm Yardi Systems (via Dallas Business Journal) recently published a report where they forecast an increase of 11% for DFW rents. One of the reasons for this is the low supply of apartments. Dallas’ rental market has less than a 4% vacancy rate and a considerable influx of people moving to the area is increasing demand.
In case you missed it, here’s Local Profile’s report on the North Texas housing market’s recent cool-down.