DFW Build-To-Rent Absorption Surges As National Market Slows

While the national build-to-rent sector works through a supply hangover, Dallas-Fort Worth's market is standing strong. 

The region has emerged as the No. 2 BTR market in the nation, and developers flocked to the metro to build its inventory of nearly 25,000 units due to strong demand from DFW’s growing population. However, the availability of prime spots for future BTR developments has dwindled, as nearly 80% of that inventory has been delivered since 2022. The sector is also facing a headwind from the federal government, with developers and investors retreating to the sidelines due to legislation that could require BTR projects to be sold to homeowners after seven years.

DFW's strong in-migration numbers, status as a magnet for corporate relocations and continued employment growth have made it one of the few markets in the country where BTR demand hasn’t diminished amid an onslaught of product deliveries. And Northmarq Senior Vice President of Investment Sales Eric Stockley said he doesn’t expect that demand will fall off anytime soon. 

"In our view, the existing product and anything that's getting delivered today is going to be super desirable going into the near future and beyond due to some of the challenges with developing new product right now," Stockley said.

Like the rest of the country, new products will be limited in DFW this year as the sector works to absorb recent deliveries. But the region’s developers are excited about their existing product and the sector’s performance in the metro. Absorption increased 30% year-over-year in 2025 for DFW, while vacancy dropped 70 basis points, Northmarq’s latest BTR report showed. 

Leading Market

While BTR vacancy rates have been elevated nationwide, DFW has bucked that trend. 

New supply delivered in 2025 outpaced the nation's absorption, causing those elevated vacancies across most major BTR markets. The national vacancy rate at the end of 2025 was 9.4%.  

DFW's net absorption was over 4,000 units in 2025, and the region’s vacancy rate fell to 6.3%. Phoenix, the No. 1 BTR market in the nation, concluded the year with a rate of 9.8%, which was a 50-bps increase year-over-year. 

"DFW's really clearly emerged as one of the strongest recovery stories nationally," said Jacque Petroulakis, chief communications officer for Phoenix-based national BTR developer NexMetro Communities. 

NexMetro believes DFW’s demand for BTR is durable, as the region is just starting to catch up to the supply wave. 

BTR rents declined nationally by an average of nearly 2% last year, while DFW’s rents stabilized. 

Welker Properties founder and CEO Andrew Welker recently completed the 343-unit Everbloom BTR project in Melissa. And he said Everbloom is leasing up quicker than anticipated. 

“We haven't had to move off of our rents,” Welker said. “We're still getting people that are choosing to pay 20% to 30% higher than [competitors’ rents] to be in our product, because we have a good product.”

The average BTR rent in DFW is $2,130 per month, more than $600 above the region’s average apartment rent. It’s also almost $900 less than the monthly mortgage payment on a median-priced home in the region, according to Northmarq’s report.

Challenges

DFW’s availability of undeveloped land has helped it attract corporate relocations, big commercial projects and continued population growth. But the influx of new BTR projects into the region has limited the availability of suitable sites for future development.

That has proven challenging for BTR developers, as rents generally decline as communities move farther from the region’s urban core. Those outer suburbs have also been hot spots for master-planned communities that deliver large swaths of new single-family homes at affordable prices.

Smaller infill projects can be easier to lease up than big BTR communities far from the region’s densest areas, Stockley said.

“It's harder to build BTR projects in areas of the metro that can deliver higher nominal rents,” Stockley said of the limited availability of suitable BTR sites. "You can go super far into the second- or third-ring suburbs, where there's a lot more land out there, but you also run into a situation where you're fighting with new single-family home sales.” 

Developers throughout the metro are also keeping an eye on the 21st Century Road to Housing Act, passed by the Senate on March 12.

The bill’s seven-year sale requirement would threaten the potential construction of 40,000 BTR units per year, the National Association of Home Builders estimated. While the bill remains stalled in Congress, industry lobbyists are working to get the language removed before it can become law. 

But the uncertainty has frozen the BTR market as investors wait to see how it plays out.

“It's definitely a headwind for BTR,” Welker said. “It makes lenders pause, it makes capital think a little more.”

Built For DFW

DFW boasted four of the country's 10 fastest-growing cities last year, and the region is on pace to overtake Chicago as the third-largest metro in the U.S. by 2035. That influx of new residents and families has made BTR very attractive for those looking to rent while they determine where they want to buy a home. 

"A lot of these renters are looking for good school districts, a little bit larger units, maybe with backyards,” Stockley said. “It just really caters to what the whole thesis for build-to-rent is, as that natural progression within a renting life cycle.”

Collin County has emerged as one of the leading areas for population growth in the region, adding around 250,000 new residents since 2020. It also features a plethora of strong school districts and median incomes well over six figures, making it one of the most active submarkets for new BTR development, according to Northmarq.

"You need higher incomes in those areas to sustain the demand side," Stockley said. "That's where those submarkets really thrive."

But DFW is also a highly attractive market for NexMetro's more affordable cottage-style BTR neighborhoods, Petroulakis said. The region offers a deep pool of renters that few other metros can match. 

That has helped DFW burn through its oversupply hangover better than anyone else, according to Welker. Developers with BTR units ready for lease are set to benefit from the region’s increased demand. 

“If you have the right product and the right location, then I think the wind is at your back right now in DFW,” Welker said.