$1,051 2Q 2024
2.7%
95.7% 2Q 2024
-30 BASIS POINTS
223 [YTD: 572]
206 [YTD: 286]
Healthy rental demand has been supporting balanced fundamentals in the El Paso multifamily market. In the first half of this year, 572 units were absorbed, far outpacing the 286 units delivered.
Unlike its Texas Triangle peers, El Paso isn’t seeing a significant wave of multifamily development. As of mid-year, only 687 units were under construction, just 1.4% of the existing inventory.
El Paso’s occupancy rates remain elevated compared to the Texas state average. At 95.7% at the close of the second quarter of 2024, they are also well above the national average of 92.2%.
QUARTERLY DEMAND
QUARTERLY COMPLETIONS
Healthy rental demand has been supporting balanced fundamentals in the El Paso multifamily market, particularly in the mid-range apartment segment. In the first half of this year, total absorption reached 572 units on a net basis, with all three quality segments—high-range, mid-range, and workforce housing—experiencing positive demand. The mid-range segment was the standout performer, however, with renters absorbing over 350 units during this period.
Unlike its peers in the Texas Triangle, El Paso is not experiencing a significant wave of multifamily development. As of mid-year, 687 units were under construction, representing only 1.4% of the area’s existing inventory. Deliveries have also been moderate, with 600 apartments brought to market between mid-2023 and mid-2024. This has resulted in modest supply for owners and operators in the El Paso market.
Occupancy rates in El Paso remain elevated compared to the state-wide average for Texas. At 95.7% at the close of the second quarter of 2024, they are also well above the national average of 92.2%. This disparity is due to a significant wave of new apartments being brought to market nationwide, a trend even more pronounced in development-friendly Texas. Metros such as Austin, San Antonio, and Dallas-Fort Worth are experiencing some of the nation’s largest supply pipelines relative to their existing inventory.
In contrast, El Paso has a more modest supply-side picture, with only 687 units currently under construction. Among El Paso’s ten submarkets, seven maintain average occupancy rates above 95%, a notable dichotomy compared to Austin, Dallas, and Houston.
Rents in El Paso managed to grow in the year ending June 2024, with effective rental rates increasing by 2.7% over this period. Looking ahead, growth is expected to moderate as secular trends and long-term fundamentals normalize. Despite this, renters remain encouraged by the relatively low asking rents, which average $1,060 metro-wide—a significant discount compared to San Antonio, Houston, Dallas, and especially Austin.
On a submarket basis, variance in annual rent growth was observed in the second quarter of 2024. All ten El Paso submarkets noted positive rental growth, with the weakest growth in the Central submarket, where rents increased by a modest 0.3%. Conversely, the Fort Bliss submarket experienced the highest annual increase, with rents rising by 4.3%, supported by the stability of the large military and military-adjacent population there.
Average Monthly Mortgage Payment
Average Monthly Rent
|
Under 35 Years
|
35 to 44 Years
|
45 to 54 Years
|
55 to 64 Years
|
65 to 74 Years
|
75 to 84 Years
|
85 Years & over
|
|---|---|---|---|---|---|---|
|
0.4%
|
-0.4%
|
0.4%
|
-0.2%
|
0.1%
|
-0.3%
|
0.4%
|
The under-35 age group is the fastest-growing renter demographic in the El Paso metro area, registering a 0.4% increase from 2019 to 2022. This trend indicates a rising demand for rental housing that appeals to a population prioritizing proximity to lifestyle amenities and employment opportunities.
At the mid-point of 2024, the El Paso apartment market is in healthy standing. With the average occupancy rate holding steady above 95% and demand outstripping supply, El Paso contrasts with its larger Texan counterparts, which have seen supply outpace demand for several quarters.
El Paso’s rental growth rate currently stands at 2.7% and is projected to rise to 3.8% over the next year, positioning it as one of the few Texas markets where rent growth is projected to exceed the national average over this period
Looking ahead, El Paso’s strategic importance as a major logistical hub, combined with the economic influence of Fort Bliss and the University of Texas at El Paso, contributes significantly to sustained apartment demand. The city’s unique role as a transnational urban center for a large cross-border population ensures it remains a vital part of regional and national supply chains, promising continued growth and investment opportunities in its apartment market.
