MARKET SNAPSHOT
Multifamily construction in El Paso has remained relatively steady in recent years, even as other Texas markets have experienced a surge in new deliveries. Over the past decade, the market has averaged 500 new units annually, with 2024 marking the largest expansion in recent years as 771 units were completed. However, development is expected to slow in 2025.
Multifamily construction starts—a leading indicator of future completions—fell 37% year-over-year in 2024 to just 276 units, well below the 10-year average of 500 units. Similarly, units under construction declined to 450 by year-end, a 43% drop from the historical average of 791 units. With only about 400 units projected for completion in 2025, the ongoing slowdown in new supply is likely to create tighter market conditions over the next few years.
El Paso’s multifamily market maintained a solid average occupancy rate of 94.0% in 2024. However, a slight decline is anticipated in 2025, with occupancy projected to dip 30 basis points to 93.7% by year-end. While demand remains steady, the market will need to absorb 400 new units entering the supply pipeline, leading to temporary pressure on occupancy. Net absorption of 300 units will help offset some of the new supply but is unlikely to fully prevent a modest increase in vacancies.
El Paso’s apartment market posted steady rent growth in 2024, with average effective rents rising 2.1% year-over-year to $1,056. Looking ahead, rent growth is expected to accelerate, with a projected 3.1% annual increase by Q4 2025, bringing the average rent to $1,089 per unit. Despite this upward trend, El Paso remains a more affordable alternative to larger Texas metros like Austin, San Antonio, and Dallas. The market’s outlook remains positive, supported by ongoing economic activity and a stable employment base. However, two key factors to watch in 2025 are the federal government’s new immigration policy and potential tariffs on Mexican exports to the U.S. Both could impact cross-border trade and employment, potentially dampening economic activity and weakening multifamily demand.
12-month period ending November 2024
El Paso’s multifamily market remains stable, with moderate construction activity and healthy rent growth. While the market has historically averaged 500 new units annually, development is slowing, with only 276 new starts in 2024—a 37% year-over-year decline and well below the 10-year average. Units under construction also fell to 450, marking a 43% drop from historical levels. With just 400 units expected to be completed in 2025, the tightening supply could create a more competitive leasing environment over the next few years.
Rent growth remains solid, with effective rents rising 2.1% in 2024 to $1,056 and forecasted to accelerate to 3.1% by Q4 2025, reaching $1,089. Despite this appreciation, El Paso remains one of the more affordable rental markets in Texas. Occupancy averaged 94.0% in 2024 but is projected to soften slightly to 93.7% by year-end as the market absorbs new supply. While steady economic activity and a stable employment base provide strong market fundamentals, external factors such as federal immigration policy and potential tariffs on Mexico could impact demand and economic growth in 2025.
Disclaimer: This multifamily forecast incorporates data from reputable third-party sources, including Costar, Yardi Matrix, the U.S. Census Bureau, the U.S. Bureau of Labor Statistics, and ESRI. While we make every effort to ensure accuracy, we cannot guarantee the reliability of the projections provided. Forecasts are inherently subject to change due to evolving market conditions, economic factors, and unforeseen events. We strongly encourage users to conduct independent due diligence and consult with an MMG Advisor before making any investment decisions based on this information.
