New Supply Focused at Top of Market; Rentals in Low- and Mid-Tiers Performing Well

The Metroplex’s robust employment market is creating favorable conditions for the rental sector, though a supply overhang will ease the pace of fundamental improvement in some areas through the end of the year. Nonetheless, attractive demographic trends should support household creation and limit the impact of new supply on the market. In Dallas, for instance, the 20- to 34-year-old cohort expanded by 8.8 percent between 2011 and 2016, nearly double the national pace of growth. On the Fort Worth side of the Metroplex, this cohort increased by 9.4 percent during that time. These young workers are a significant driver of renter household formation in both the single- and multifamily sector. Demand for single-family rentals is particularly strong in working class neighborhoods, where supply shortages are pronounced. Most of the new housing supply in the Metroplex has been Class A apartments and new homes. The increase in home prices has made it difficult for more residents to afford the down payment[…]

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