An Outlook on Apartments in the Lone Star State

By Rickey Mirabito

The mass population migration into Texas during the height of the pandemic has been well documented. To this day, the state remains a top relocation destination for out-of-state consumers. Texas is known for being tax and business friendly and, because of this, has succeeded in attracting quality jobs with major employers, many of which are Fortune 500 companies. The state’s employment reached historic highs in 2023, outpacing the country by a full percentage point with 2.4% annual growth between December 2022 and December 2023, when the nation’s overall was 2.0%.[i] Texas’s strong employment and relatively affordable cost of living are two likely reasons so many Americans have chosen to reside in the state.

Many of the rents within the state’s metros grew alongside the influx in population in recent years. More recently however, the state’s big cities have experienced rent rate declines. For example, rents declined 1% in Houston between February 2023 and February 2024. The average median rent in Houston currently sits at $1,286 and the city ranks #43 in rent growth among large U.S. cities.[ii] In Dallas, rents declined 2.1% over the same period. Median rent in the city is $1,347 and Dallas rent growth ranks #71 of the U.S.’s top 100 cities.[iii] Austin rents declined 6.7% year-over-year, median rent in the city is $1,472 and the city’s rent growth ranks #92 of the country’s large cities.[iv]

Amidst current economic factors and higher interest rates, financing has become more challenging for the state’s apartment property owners. Fortunately, good options still exist. Freddie Mac, Fannie Mae and HUD remain key sources of multifamily finance, providing solutions for property owners looking to either acquire or refinance apartment communities in Texas (as well as in the other states).

Freddie Mac, Fannie Mae and HUD are all mission driven entities, fully committed to keeping loan options available to multifamily property owners, even when economic dynamics are more challenging. Each agency fills a critical need in the housing sector with their various multifamily loan programs accessible to owners across Texas. Whether the property in question is affordable, workforce or market-rate, these agencies offer applicable loan programs.

The Regions Real Estate Capital Markets team regularly assists apartment owners in Texas. To explore loan options and to contact our team, visit the Regions Real Estate Capital Markets portion of the Regions Bank website.

Disclosure: This?information is general in nature and is not intended to be legal, tax, or financial advice. Although Regions believes this information to be accurate, it cannot ensure that it will remain up to date. Statements or opinions of individuals referenced herein are their own—not Regions'. Consult an appropriate professional concerning your specific situation and irs.gov for current tax rules.?

References or links to third-party websites do not imply endorsement.

About the Author

Rickey Mirabito is Managing Director with Regions Bank and specializes in multifamily finance nationwide with a focus in the Central and Northeast United States.

[i] Texas Labor Market Shows Steady Growth, Record High Levels for Jobs and Labor Force, Texas Workforce Commission, April 19, 2024, https://www.twc.texas.gov/news/texas-labor-market-shows-steady-growth-record-high-levels-jobs-and-labor-force.

[ii] Houston Rent Report: March 2024, Apartment List, March 2024, https://www.apartmentlist.com/rent-report/tx/houston

[iii] Dallas Rent Report: March 2024, Apartment List, March 2024, https://www.apartmentlist.com/rent-report/tx/dallas

[iv] Austin Rent Report: March 2024, Apartment List, March 2024, https://www.apartmentlist.com/rent-report/tx/austin