Multifamily Rent Growth Goes Negative For First Time In 6 Years
For the first time in almost six years, according to Axiometrics, Houston's annual effective rents have dropped. It's a modest decline—rates went down .06% in April—but rents have not decreased since August 2010, before the apartment market recovered from the Great Recession. April was the 10th straight month that rent growth slowed and the 15th month of the last 16.
Renters in the MSA paid an average of $1,071 in April. The average rent level would have to increase more than $10 in May for annual effective rent growth to regain positive territory. Houston apartments were 93.5% occupied in April, 121 bps lower year-over-year.
Houston employers added only 7,700 jobs in the last 12 months, according to Axiometrics senior real estate economist KC Sanjay. The urban-core Montrose/River Oaks submarket, which is receiving the newest supply, is the primary contributor to Houston's rent growth decline. The market's annual effective rent growth was -5.2% in April.
Bisnow's Houston reporter is anecdotal evidence of Axiometrics conclusions. Kyle lives in Montrose/River Oaks and his rent decreased nearly 6% when he re-signed his lease in April.