DFW, Houston BTR Completions Last Year Power Texas To Top Of National Development Mountain

Build-to-rent completions went down slightly in Dallas-Fort Worth last year, but the metro still saw enough finishes to end the year ranked No. 2 in the nation.

No. 4 Houston and every other metro in the national top 10 for completions reached a five-year high last year. DFW's 3,197 units delivered marked a 0.1% decrease from 2023, according to an analysis from Point2Homes using data from Yardi Matrix.

Phoenix was the only metro to deliver more BTR units than DFW, at 4,460 completions. Atlanta rounded out the top three with 3,035 BTR completions, edging out Houston's 2,505 new units delivered.

The Austin and San Antonio metros were also in the top 20 nationally but also missed five-year highs with their 715 and 577 units, respectively.

Yardi Matrix Manager of Business Intelligence Doug Ressler said Texas could be reaching a saturation point over the long haul, although demand is plentiful for now.

“The BTR market in Texas is characterized by steady growth and improving absorption rates,” Ressler said via email. “While the current pipeline is robust, the market could reach saturation if the supply outpaces demand. However, given the state's ongoing population growth and economic expansion, and shortage of affordable housing nationwide this seems unlikely in the near term.”

Despite the slight decrease in completions last year, the growth of BTR shows no signs of slowing down in the Metroplex.

DFW has nearly 8,500 home rental projects under construction, which is second in the nation, again to only Phoenix. The national BTR sector hit an all-time high last year with 39,000 new units completed, and there are nearly 110,000 single-family rentals in the pipeline.

Over the last five years, DFW deliveries totaled 10,413 units, which was nearly twice the 5,250 units completed in Houston.

DFW's total of 14,682 BTR units as of the end of last year represented a 244% increase over the metro's 2019 total. Houston's total grew 151% in that same time, while Austin and San Antonio saw increases of more than 200% since 2019. 

Affordability drives many millennials and Generation Z adults to opt for renting over homeownership due to high property prices and student debt. The larger inventories in DFW and the other Texas metros make the multifamily housing option that feels more like single-family residential more visible than it is in other states, Ressler said. 

The high demand and growth potential of BTR properties in DFW have brought in investors and developers eager to increase the supply. With institutional investors also attracted to the market’s stability, the influx of investment dollars is likely to sustain BTR development for the long run.

“If economic factors such as high mortgage rates and elevated home prices persist, BTR will remain a popular choice,” Ressler said.

Frisco and Arlington are among the cities most in demand for new BTR construction, though Roanoke was home to the largest new community in the nation. The 396-unit Litsey Creek Cottages delivered there last year. 

This year is already shaping up to be another busy one on the Texas BTR front. 

Blackstone Real Estate portfolio company Tricon Residential just opened two new BTR communities in the state, one in McKinney and the other in Katy. 

Work is also underway on a $115M BTR community in Celina from Taylor Morrison Home Corp. subsidiary Yardly. Delivery of the development's nearly 400 units is expected to begin in the third quarter next year. 

Another 450-plus BTR units are planned on Fort Worth's east and south sides from developer NexMetro Communities of Phoenix.