Multifamily rents in the Dallas-Fort Worth region are down an average of 1% over the past 12 months as of the end of December 2023. The year-end results are the first time since 2009 that apartment rents did not increase in a year, a result of the heavy supply of new units in high-growth areas and owners and managers lowering rents to compete for renters.

While the market reported six months of consecutive declines in average rent, the magnitude of the rent declines is diminishing, which may indicate a potential rebound for apartment rents in 2024.

Weaker rent performance in Dallas-Fort Worth are found across the quality spectrum, led by pricey four- and-five-star properties. Average rents in higher-end properties ended the year down 1.9% as developers added 23,900 units over for the year with the heaviest number of completions occurring in Collin and Denton counties, along with more supply coming to neighborhoods in Fort Worth. Meanwhile, builders in Rockwall added 1,758 units, growing the existing inventory 20% in a single year. In turn, rent growth in Rockwall is down 1.9% over the past year.

Mid-tier, three-star properties ended the year with average rents down just 0.3%, the first time this segment reported declining rents since 2009. These properties are typically more immune from greater competition coming from new supply, but more renter neighborhoods report softening results in this group.

The weakest three-star results are found in Las Colinas, Far North Dallas and North Dallas, where there’s relatively little threat from new supply. The trend provides more evidence that pricing power has shifted in favor of tenants, agnostic of quality in some instances.

The Dallas-Fort Worth multifamily market is anticipating a rebound in the next year, tracing a similar theme as the national level. CoStar’s forecast anticipates average apartment rent growth to end the year at 3% which is supported by improving demand and lower construction levels, yielding tightening vacancy rates across the market.