Apartment rentals are soaring across Texas, according to the latest analysis by the National Association of Realtors (NAR). That’s good news for landlords, but tenants are facing steep increases in rent.
The Dallas-Fort Worth area led the nation over the past 12 months with 47,182 apartments filled, with Houston in second place at 37,117. Austin came in eighth place with 20,443, just behind Chicago. San Antonio came in 18th with 10,808, behind Minneapolis.
According to Scholastica “Gay” Cororaton, senior economist and director of housing and commercial research for NAR, Texas as a whole attracted a large number of people in 2020.
“Dallas (and) Houston are the top two areas that are attracting people,” Cororaton said. “And I think one (reason) is because rents there are still relatively cheaper.”
But that reality is changing fast. Like much of the country, major cities in Texas are experiencing double-digit annual increases in the cost of renting an apartment.
“With people moving (to Texas) and also with the tight housing supply — that’s pushing up rents,” Cororaton said.
The situation isn’t as bad in Texas when compared to places like California or New York, but it’s bad enough for tenants. Year-over-year, rent has been up by 10.4% in Houston, 13.1% in San Antonio, 14.9% in Dallas-Fort Worth, and by a whopping 21.6% in Austin. The nationwide average increased by about 11% over the past 12 months.
This comes at a time when eviction rates are soaring across the country due to the COVID-19 pandemic and its effect on lower-income residents.
A silver lining, according to Cororaton, is that the massive influx in tenants has spurred an increase in multifamily-home construction across the Lone Star State. This could eventually help to slow rental increases as the state’s apartment supply grows.
“For Austin,” Cororaton said, “you have about 20,000 units under construction, which is about 8.3% of the current stock.”
Cororaton added that new construction in Houston accounts for about 3% of the current stock.