DFW's 2.8% rent growth marks the first time since 2017 where North Texas rent growth outpaces the US norm.

FORT WORTH—The US multifamily market is beginning 2020 in great shape, says Greg Willett, chief economist at RealPage. Peaking in the third quarter, the occupancy rate got as high as 96.3% in 2019, in line with all-time highs.

While late-in-the-year seasonal cooling took the occupancy figure to slightly under 96%, that result is still well above the long-term norm. Demand for some 280,000 market-rate units in the April through September timeframe ranked among the biggest blocks of prime leasing season absorption ever recorded. Annual rent growth held at a healthy level around the 3% mark throughout the year. Class-A product rent growth, which had been lagging earlier, gained momentum to perform in line with the price increases for the class-B and class-C stocks, Willett says.

Increasing completions point to a competitive leasing environment for luxury product in 2020. About 550,000 market-rate apartments are under construction right now. Approximately 366,000 are scheduled to finish in 2020. That targeted delivery volume jumps sharply from 2019 completions of around 279,000 units and roughly 75% to 80% of 2020's additions will command luxury product rents. Owners and operators will be racing to get those new completions through initial lease-up as quickly as possible, especially given expectations of slowing job production and, in turn, new household formation. Moreover, Willett says the market will remain very tight for more moderately priced product.