- Texas A&M’s Real Estate Research Center forecasts modest but above-average economic growth alongside a sharp pullback in apartment and industrial construction through summer 2027.
- Statewide apartment deliveries are projected to fall from 93,000 units in the past year to just 40,000, while industrial rents range from $8.90 to $12.80 per square foot.
- Slower supply growth could help stabilize rents across most property types, but elevated mortgage rates, rising insurance costs, and federal policy uncertainty still cloud the outlook.
Texas’s commercial real estate market is bracing for a much quieter construction cycle, with an apartment delivery slowdown projected across the state’s largest metros, according to the Texas Real Estate Research Center (TRERC) at Texas A&M University. The center’s forecast, released September 10, 2026, projects multifamily deliveries will drop from 93,000 units over the past year to just 40,000 by summer 2027, even as Texas’s economy continues to outpace the nation’s.
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A Cooling-Off Period
Texas apartment developers delivered 93,000 units over the past 12 months. That construction boom flooded major metros with new supply. It also pushed landlords to offer concessions to fill units.
TRERC expects the pipeline to shrink to 40,000 units by next summer. That decline suggests the multifamily market is finally working through its oversupply.
Effective rents across the state’s 2.5 million-plus apartment units still average $1,372 a month. However, rent growth has slowed. Some newer properties now show negative effective rent changes as owners use concessions to lease up.
The Details
Beyond apartments, the forecast shows a Texas economy that continues to expand. However, growth remains measured.
TRERC projects Texas GDP growth of 2.4% to 2.8% annualized by August 2027. That would outpace the U.S. forecast of 2% to 2.5%.
Texas payroll employment should also outperform the national forecast. TRERC expects gains of 1.1% to 1.7%.
Texas’s population should grow 1.1% to 1.5% over the same period. Personal income is forecast to rise 5% to 5.4%.
TRERC expects the 30-year fixed mortgage rate to remain between 6% and 7%. The Federal Reserve’s target rate could reach 3.4% to 3.8% by August 2027.
Meanwhile, inflation should run at an annual rate of 2.1% to 2.5%.
Single-family home sales could rise 2.5% to 354,000 statewide. The median price should increase 1.8% to $341,000. Permits, however, should remain flat at 149,000.
Zooming Out
Texas’s industrial and office sectors also show slower but positive momentum.
Industrial rents statewide range from $8.90 to $12.80 per square foot. TRERC expects more than 50 million square feet of industrial deliveries over the next 12 months.
That volume equals nearly 3% of the state’s 1.8 billion-square-foot inventory. The pace follows a period of outsized growth in markets like Dallas-Fort Worth, where the development pipeline has led the nation.
Office construction remains muted by comparison. TRERC expects fewer than 5 million square feet of new deliveries through summer 2027.
Texas already has 1.2 billion square feet of office inventory. Rents range from $26 per square foot for Class C space in San Antonio to nearly $70 per square foot for Class A+ towers in Austin.
Why It Matters
The supply slowdown matters most for landlords still working through the multifamily glut of recent years.
Markets like Dallas-Fort Worth could benefit sooner. Multifamily absorption has been climbing there. Fewer new units could also help rents firm up faster than the statewide average.
Retail is following a similar pattern. TRERC projects rent growth of 3% in Dallas and 2% in San Antonio.
The state has 1.5 billion square feet of retail space. TRERC expects that inventory to grow by just 1% through summer 2027.
For investors, the forecast points to a more balanced market. Texas’s post-pandemic building boom appears to be giving way to slower supply growth across most property types.
What’s Next
TRERC flagged several wildcards that could reshape the outlook. These include federal tariff policy and a national debt exceeding $40 trillion.
The January 2027 launch of Opportunity Zone 2.0 could also have an impact. The program could funnel fresh capital gains investment into targeted Texas census tracts.
The report also highlighted potential litigation over institutional investor restrictions on single-family home purchases.
Meanwhile, state debates continue over property tax relief, insurance costs, and groundwater regulation.
Rural land prices should remain roughly flat after a 6.6% year-over-year gain through 2025. TRERC expects sales volume to increase by the end of 2027.
Watch how quickly multifamily concessions ease as the state’s delivery pipeline continues to shrink.
