Supply and Demand
The Dallas/Fort Worth multifamily market made further progress toward balance during Q3 2026 as the development pipeline continued to contract. Units under construction totaled 29,700 units, down 13.6% quarter-over-quarter and 28.6% year-over-year (YOY), reducing the pipeline to roughly half its Q2 2023 peak of more than 60,000 units. Year-to-date (YTD) construction completions were 18.9% below the same period of 2025.
Demand outpaced that supply. Net absorption totaled over 26,700 units YTD, a gain of 27.7% YOY that already exceeded the full-year totals for both 2024 and 2025 and surpassed construction completions by more than 5,600 units. Leasing was broad-based, with 36 of 38 submarkets recording positive YTD net absorption. Net absorption topped 9,000 units in each of the last two quarters, a marked step up from the 2,388 units recorded in the Q4 2025.
Market vacancy closed Q3 at 9.4%, the second consecutive quarterly decline and below the 10.0% high reached in Q1. More significantly, vacancy fell below its year-ago level for the first time since early 2022, as the YOY change swung from an increase of 90 basis points (bps) in Q1 to a decline of 10 bps in Q2. The share of submarkets recording annual vacancy declines roughly tripled over that span.
Pricing
Effective rents averaged $1,461 per unit during Q3, 2.0% below the year-ago level and the smallest annual decline since the Q1 2024. That decline narrowed from 4.3% in Q1 as recently completed communities leased up. Five submarkets recorded positive annual rent growth, up from none a year earlier, including Uptown Park Cities and Downtown Dallas, the metro’s two highest-rent submarkets.
Investment Sales
Investment activity remained steady through Q3, with almost 130 transactions encompassing just under 31,000 units and $479.9 million in sales volume YTD. Although activity trailed the 145 transactions, nearly 39,000 units and $1.02 billion recorded over the same period of 2025, buyers pursued opportunities as operating trends strengthened. The metro’s scale, with nearly 900,000 units of inventory, sustained investor interest and positioned the market to draw capital as fundamentals improved.
