These Texas Cities Are Dominating U.S. Apartment Demand. Here’s Why

New Data Shows Texas Rental Market Strength

Texas is leading the U.S. apartment market in 2025 and with good reason. Major metros like Dallas–Fort Worth, Houston, Austin, San Antonio, and smaller hubs such as Webster are experiencing unprecedented demand for multifamily housing.

According to a recent report (1): over 17% of all new apartment households in the U.S. have formed in Texas during the past year—the highest share of any state. That surge in rental activity reflects a powerful mix of population growth, job creation, affordability, and ongoing supply especially in Dallas, Houston, and emerging service-area cities. Let's dive into the factors fueling this trend.

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Table of Contents

1. Introduction

2. Dallas–Fort Worth: Finance & Absorption

3. Houston: Balanced Supply & Demand

4. Suburban Hubs: Webster & Beyond

5. Macro Trends: What’s Fueling Texas

6. Will Supply Keep Up?

7. Stakeholder Guide: Impact & Actions

8. Final Takeaway

Dallas–Fort Worth: Record Financing and Absorption

• Record Financing: Since early 2024, Dallas–Fort Worth has secured financing for nearly 104,000 new apartment units, more than any other U.S. city, even New York (2).

• New Construction: About 36,000 new apartments are expected to be completed in DFW by the end of 2025. At the same time, around 67,600 new households are expected to form in the area (3).

• Market Health: Apartment rents in DFW dipped slightly (down 1.8% year-over-year), but occupancy rates are still strong at about 92.7%, thanks to job growth of about 1.6% (4).

Why it matters:

Steady demand from new households and financing appetite continue to attract developers and investors, keeping DFW at the forefront of national multifamily activity.

Dallas and Fort Worth lead US real estate growth, with year-over-year home price increases of 11.4% and 8.7%, respectively, significantly surpassing the national average of 5.4%.

Houston: Steady Absorption & Balanced Supply

Houston’s apartment market is holding up well in 2025, even as new buildings keep coming online.

• Apartments Filling Up: In the first quarter of 2025, nearly 3,700 apartments were rented, which is a big jump compared to the same time last year. (5)

• New Construction: About 14,700 new apartments are being built around Houston right now, but the market seems able to handle it. Fewer new apartments (about 9,000 units) are expected to be completed this year compared to nearly 24,000 last year. (5)

• Rents & Occupancy: Rents have stayed pretty steady, with only a 0.2% increase year-over-year, averaging around $1.49 per square foot. Occupancy is healthy too, sitting around 90.5%.

• Affordability: Houston is still considered the second-most affordable big city for renters in the U.S., with typical rents around $1,239 a month, although a small rent increase of about 2–3% is expected this year. (7)

• Build-to-Rent Boom: There’s a big push to build rental single-family homes too, with over 4,600 houses in progress—putting Houston in the top five cities nationally for these kinds of projects. (7)

Bottom line? Houston is absorbing lots of new apartments while keeping rents and occupancy pretty stable, making it one of the stronger rental markets going into 2025.

Webster & Service‑Area Hubs: Growth Beyond the Core

While not as large as Dallas or Houston, cities like Webster (near Houston) are being swept up in the wave. These service-area locations benefit from spillover demand, as renters seek more affordable, job-accessible suburbs. Anecdotal market insights from local brokers confirm a significant uptick in new leases and occupancy rates.

Macro Trends: Texas at the Vanguard

Three major factors are fueling this surge:

1. Population Growth

   Texas continues to attract migrants across age groups, such as young professionals, families, and retirees, thanks to its strong economy and lower taxes.

2. Job Creation

   Houston is projected to add over 75,000 jobs in 2025 across sectors like healthcare and energy (8). DFW continues its string of Fortune 500 expansions.

3. Affordable Land & Investment:

   Suburban markets offer comparatively affordable land, easing development, while core urban centers attract institutional investors.

Together, this trifecta has turned Texas into the apartment absorption epicenter of the U.S. Dallas/Fort Worth and Houston rank among the top five U.S. markets in multifamily density and investment capital (1).

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Will Supply Keep Up?

There are signs the supply boom is cooling:

Fewer New Apartments: The number of new apartments finished in early 2025 dropped after a surge in late 2023 and early 2024 (9).

DFW Slowdown: In Dallas–Fort Worth, new apartment deliveries are expected to fall by about 49% in 2025 compared to 2024.

Houston Slowdown: In Houston, apartment completions are forecasted to drop by approximately 61.6% in 2025, down from 23,697 units in 2024 to 9,099 units in 2025, according to market projections.

Still, Texas’s pipeline remains sizable. Strong household formation ensures sustained demand through 2025 (1).

What This Means for Stakeholders

For Investors & Developers:

Texas offers strong opportunities, especially in the suburbs and mid-priced markets. Now is an opportune time, but zoning, permitting, and financing still matter for long-term performance.

For Renters:

While rental demand remains high, the gradual return of supply is giving renters more options. But supply could tighten by the end of 2025, especially in popular suburbs.

For Local Leaders & Planners:

• Sustainable growth planning is essential for balancing infrastructure, schools, and transportation.

• Zoning reforms and approval streamlining can encourage balanced development.

• Affordable housing incentives will remain critical as competition for land increases.

Final Takeaway: Why Texas Cities are Dominating U.S. Apartment Demand

From record-breaking financing in DFW to robust rental absorption in Houston and steady growth in service-area hubs like Webster, Texas remains the nation’s apartment heartbeat. Its blend of population inflows, job creation, and supply momentum ensures Texas cities will stay central to U.S. multifamily investment and development throughout 2025. Taken together, these factors offer undeniable proof of why Texas cities are dominating U.S. apartment demand.

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References

1. Charlesgate “New Geography of Apartment Demand in 2025” (charlesgate.com)

2. CRED iQ via CRE Daily, June 6, 2025 (credaily.com)

3. Colliers, Q4 2024 Houston Report (globest.com)

4. Yardi Matrix, Dallas Q1 2025 Report (yardimatrix.com)

5. MMG Real Estate Advisors, DFW Forecast 2025 (mmgrea.com)

6. MMG, Houston Forecast 2025 (fanniemae.com)

7. Matthews Real Estate, Houston Q4 2024 Data

8. Houston Properties Insights 2025 Forecast (houstonproperties.com)

9. RealPage Analytics Q1 2025 Supply Data (realpage.com)