June 2023 Market Report

Posted By: Jordan Brooks Dimensions Online,
Class A Resilient, But Showing Effect of New Supply

Persistently low apartment demand and an active new construction pipeline have taken their toll on Greater Fort Worth average occupancy since its peak in early 2022. The 500-basis point decline from February of 2022 has played a role in taking the wind out of the sails of rent growth. Zooming in below the market-level numbers, some interesting differences have emerged at the price class level across all of these metrics.

All numbers will refer to conventional properties of at least fifty units for year-to-date figures through May.

Net Absorption and Average Occupancy

Net absorption through May for all four price classes was lower than for any corresponding period of the last five years. The issue has been most acute within the workforce housing segments. Class C suffered a net loss of leased units for the first time in recent years, but the loss was less than 100 units. For the Class D group, a net loss of about 200 leased units was in line with last year’s performance. 

In the top two price tiers, Class A demand has been more resilient. While the just more than 600 net units absorbed was the lowest total of the last five years for this portion of the calendar, both 2019 and 2020 were ahead of this year’s total by the slimmest of margins. The story was a bit different in the Class B space. Around 200 net absorbed units across these properties was lower even than last year’s already paltry total and was significantly lower than in any other recent year.

The effect of lackluster demand that has now persisted for some time has been clear on occupancies. Of course, for the Class A subset new supply plays a major role. Class A average occupancy has declined an astounding 7% since the start of the year to end May at 80%. But when just properties that entered 2023 already stabilized are evaluated, average occupancy held steady at 94%.  

The other standout in the price class occupancy data was in the workforce housing area. The top two price tiers currently have fairly low average occupancy, but each average is within the range established over the last handful of years. For Class C and Class D, the current averages are well below the normal range. Each finished May right around 90%. These segments were recently accustomed to averages in the 93-94% range.

Average Effective Rent and Lease Concessions

As would be expected given the absorption environment, only Class A rent growth has remained robust. A 4% average effective rent gain for new leases was lower than in the first five months of 2021 and 2022 but was also squarely ahead of the gains from the 2019 and 2020 years. 

For Class C and Class D, rent growth has remained in negative territory so far this year. For Class C, as with net absorption, the loss was a small one. A decrease of less than 1% was the first decline in the last handful of years. The larger decline was in the Class D group. A loss in average effective rent for new leases of just more than 1% was also the first decline for this part of the calendar in recent years. 

Again, as was the case with net absorption, Class B presented something of an in-between case. Rent growth of just under 2% was lower than the average from recent years prior to 2021 and 2022, but the shortfall was slight. For example, in both 2018 and 2019, average effective rent growth through May was just over 2%.

Lease concessions have been an increasing factor in the market over recent months. Each price class has seen a double-digit increase in discount availability for new leases, but the most dramatic moves have been in the bottom two price tiers. An approximately 80% increase in availability since the start of the year resulted in close to one-quarter of Class C properties offering a discount for new residents to end May. For Class D, a 40% increase in availability brought the share of properties offering a lease concession to 20%. No price class ended the period with discount availability at the pandemic-era peak. but, after sizable increases over the last year, the workforce housing segments are closest. 


A clear dichotomy has emerged in Greater Fort Worth price class performance. At the top of the market, Class A demand has not been stellar but has been considerably more resilient than in the rest of the market. The challenge has been an active new construction pipeline that continues to pressure occupancy.

Outside of Class A, occupancy has been under pressure as well, but from absent demand rather than from a lot of new supply. For Class B and Class C, net absorption has been in a tight range around zero so far this year and rent growth has looked very different than at the top of the market as a result. For Class D, the largest loss of leased units corresponds to the largest decline in average effective rent. 

Summer is approaching, and just in the nick of time. So far 2023 has exhibited signs of a return to normalcy from a seasonality perspective. It will be important for Greater Fort Worth multifamily to see the usual summer bounce in demand materialize this year.  

Jordan Brooks
Senior Market Analyst – ALN Apartment Data

Jordan Brooks is a Senior Market Analyst at ALN Apartment Data.  In addition to speaking at affiliates around the country, Jordan writes ALN’s monthly newsletter analyzing various aspects of industry performance and contributes monthly to multiple multifamily publications. He earned a master’s degree from the University of Texas at Dallas in Business Analytics.