Anyone looking for an apartment in Fort Worth – or across the North Texas area – will find rent increases across the board.
According to a recent report from Rent.com, rents for a one-bedroom apartment in Fort Worth are up nearly 10% year-over-year in July, hitting an average of $1,296. But that percentage is low compared to some nearby cities, such as Irving, which saw increases of 28% year-over-year in July, while Dallas showed a 16% increase in the same time period.
The Rent.com report cites national factors at play, such as people opting out of the home buying market with rising interest rates, and Texas’ continuing population growth for the continued increases in rents.
Lola Kelly, an apartment manager at Willow Two Apartments, a 110-unit complex in Arlington, said the prices are going up because operational costs are increasing. Landscapers charge more because of the cost of gas, and trash pickup services costs have gone up about $200, she said. Pool chemicals have tripled in price.
“The cost of doing business overall has gone (up), like, sky high,” Kelly said. “Doubled, in some cases, just things you wouldn’t even think about.”
In the past 18 months, they raised rent by about $100, and other area apartments have raised rent by about $200 to $300.
“As long as inflation is going up all across the board, then rent will have to keep going up to stay afloat,” she said.
There’s a lot of demand for the apartment — it’s completely occupied right now and they get about 40 calls a week about availability, she said.
Harold Hunt, a research economist at Texas A&M Real Estate Center, believes the rent increases are starting to have an impact.
“I think rents have gotten to a point where the pig’s kind of squealing here,” he said. “You’ve got people that are probably doubling up because they can’t afford it so they get a roommate.”
While those prices are still going up, the increases are moderating, said Hunt.
“Just like the rest of the state, at least the major cities, rents in the North Texas area are still going up, but they’re going up at a slower pace, and occupancy has started to drop,” he said.
Hunt points to inflation taking a bigger cut of household income as one reason for the slowdown.
“People have a lot more of their paycheck going to other essentials, such as fuel, so it’s hard to justify paying higher rent prices,” he said.
Hunt points to statistics that indicate apartment occupancy is down slightly. According to a CBRE report on the second-quarter 2020 multifamily market in Dallas-Fort Worth, occupancy fell to 96.2% in the second quarter, down from 97.4% in the first quarter.
He also noted that new apartments coming online have also seen a drop. The same CBRE report indicates deliveries of new apartments are down to 4,623 units in the second quarter, a decline of 1.3% from the first quarter.
Brian Carberry, an analyst at Rent.com, said newly-constructed apartments are asking more partially because they, too, have had costs increase.
“A lot of these new projects had delays of construction due to supply chain issues or labor shortages or whatever it might be and inflation increasing the cost of the materials that they need,” he said. “So these projects cost a little bit more and that’s going to translate into higher rents.”
Rent.com’s Carberry said demand, particularly in Texas, remains high for apartments.
“We’re not building anywhere, really, in the country at the pace that we’re seeing demand, at least for right now,” he said.
Carberry notes that despite the recent increases in rent prices, Texas is still affordable compared to other areas of the country. “As long as Texas has that affordability edge, people are going to keep moving there and that will keep deman up,” he said.
Seth Bodine contributed to this report.
Bob Francis is business editor for the Fort Worth Report. Contact him at email@example.com. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.