Texas Multifamily Demand Is Outpacing Supply—Here’s What That Means for Investors

Texas Multifamily Demand Is OutpacingSupply—Here’s What That Means for Investors

Despite what national headlines might suggest, the story in Texas isdifferent.

According to RealPage, Houston justposted one of the strongest demand surpluses in the country, absorbingover 8,000 more units than were delivered in the past year.  Dallas wasn’t far behind, outpacing new supplyby 3,500+ units.  These are excitingmetrics in today’s market—and they signal something important:

Multifamily demand in Texas isn’t just holding up, it’s accelerating.

Over the past 18–24 months, Texas led the nation in new multifamilyconstruction. But that construction wave is tapering off—sharply.

• Starts are down: Texas     apartment starts dropped from 114,000 units in 2022 to just under 39,000     in 2024.
• Deliveries are     slowing: That means fewer new units coming online in 2025 and 2026.
• Demand remains     strong: Population growth, job creation, and migration trends are all     feeding sustained absorption—particularly in Houston, Dallas, and Austin.

The result? Tightening fundamentals in the face of declining newsupply.

• Houston: #2 in the     nation for net demand surplus, behind only New York.  This isn’t just “holding the line”—this     is market leadership.
• Dallas: Right behind     Houston, with robust job growth and a healthy rent curve despite heavy     deliveries in 2023.
• Austin: Deliveries slightly     exceeded absorption, but by only ~50 units—virtually balanced.

These aren’t speculative trends, they’re hard numbers reflecting realleasing velocity and renter demand.

So, what are we doing at Lone Star Capital?

We are leaning into these strong Texas metros with real job growth, notjust headline rent growth.  We arepositioning investor capital now, while distress and dislocation still createopportunity.  We are also takingadvantage with our strong team that knows how to navigate compressed margins,rising costs, and changing cap rate environments.

Texas multifamily is entering a window of supply constraint and demandstrength and that’s a powerful setup for long-term value creation.  At Lone Star Capital, we’re tracking thisclosely and actively acquiring in the markets where demand is outpacingdeliveries.

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