The North Texas apartment market is benefiting from the housing crunch, and that should continue in 2008, industry analysts predict.

Many potential homebuyers are now locked out of the mortgage market, and thousands of homeowners are losing their properties to foreclosure.

It's already boosted apartment rentals.

"The third quarter [net leasing] was very strong, and we tie it back into people having difficulty getting loans," said Greg Willett, vice president of research for apartment analyst M/PF YieldStar.

"Would-be first-time buyers are really shut out," Mr. Willett said Wednesday at the company's annual apartment forecast seminar.

M/PF YieldStar predicts that apartment occupancy levels in the Dallas-Fort Worth area will be strong during the next 12 months.

But not all of the homeowners who are now losing their houses to foreclosure will opt for apartments, he said.

"We don't think they actually end up in apartments," Mr. Willett said.

Many of them, he said, "are renters but not apartment renters. These people are going to go to the excess single-family home inventory, of which so much is offered for rent."

Hessam Nadji, a researcher with real estate broker Marcus & Millichap, said he still expects an eventual wave of new renters because of the current housing market woes.

"I'm not hearing that people are coming back to the rental market from homeownership in droves yet," Mr. Nadji said. "But we are seeing signs of it, and we expect it will be there."

And landlords are already getting a boost, he said.

"Renters are staying renters longer," Mr. Nadji said. "We are losing fewer people to homeownership because financing is harder to get."

Regardless of whether apartment landlords see a windfall, they can look forward to a pretty solid market during the rest of 2007 and into 2008.

"Right now D-FW and Houston are the number one and number two job production centers in the country," Mr. Willett said. "There is good underlying support for housing demand in general."

Over the next four quarters, M/PF YieldStar predicts, net apartment leasing will total about 8,300 units. That's close to demand for the previous year.

Dallas-Fort Worth is the second-busiest apartment building market in the country behind Houston.

Even though there are more than 10,000 apartment units in the development pipeline, market analysts aren't concerned.

"Teardowns are becoming so frequent, they are helping to limit inventory growth," said M/PF YieldStar analyst Chandra Gajjar. "On net in D-FW, we have actually lost 100 apartments in 2007."

That's because developers have knocked down about 5,500 rental units in the last year to make way for construction.

The teardowns have also helped boost overall apartment occupancy rates to 94.3 percent. And occupancy levels are even higher in some areas of the city.

"This is actually the strongest occupancy rate D-FW has seen in six years," Ms. Gajjar said.

Landlords feel good enough about the market that they have raised average rents more than 2 percent in the last year.

Ms. Gajjar said apartment construction is centered in a few key neighborhoods.

About 3,000 units are going up in Dallas' downtown and Uptown districts.

About 900 units under way are in the old financial district in downtown.

"Most of these are high-rise office buildings being converted into apartments," she said.

Another big pocket of construction is in Dallas' northern suburbs.

"We have about 3,300 units being built there," Ms. Gajjar said. "A large portion of those are in West Plano."

Timing could be a challenge in some neighborhoods.

"If all these projects come on line at once, there is some potential danger lurking in the future," she said.

Developers remain bullish on the Dallas area.

Phoenix-based Alliance Residential has more than 1,000 apartments under construction in the Dallas area.

"We continue to look for both urban and suburban development opportunities," said Nick Chapman, managing director of Alliance's North Texas office. "It is getting tougher and tougher to find quality sites.

"There is a lot of competition out there these days."