Houston Apartment Rent Prices Falling After More Than 18 Months Of Steady Increases
Houston apartment prices and occupancy took another hit in October after almost two years of steady growth, a new report shows.
Apartment occupancy dropped for the third consecutive month, coming in at 90.7% in October, according to ApartmentData.com’s November report. This represents a downward trend since April, when occupancy rates were at 91.7%, Community Impact reported.
Meanwhile, rental rates were $1,254 per month in October, a slight drop from September’s $1,261 per month as rent growth cools locally and nationally.
Another November report put out by Apartment List pegs median rents in Houston at $1,074 for a one-bedroom apartment and $1,288 for a two-bedroom apartment in October. This marks a 0.3% decrease from September, though still 4% higher than October 2021.
ApartmentData's report indicates rent is up about 8% year-over-year.
Houston rent increased through the entirety of 2021, including some significant month-to-month jumps. From September 2020 to September 2021, for example, rent increased from $1,046 to $1,162, a 12.8% increase, Community Impact reported.
The Houston rent growth slowdown comes as asking rent declined nationally in Q3 at a higher rate than expected. CoStar Group National Director of Multifamily Analytics Jay Lybick said last month that with asking rents declining 0.4%, it was the weakest Q3 for multifamily in three decades.
“With an estimated 110,000 new units set to deliver in Q4, all signs point to rent growth slowing even faster than initially projected by the end of the year,” Lybik said in a statement.
Houston has gained about 22,000 units in the past year, with approximately another 17,000 units under construction, according to ApartmentData’s report. Another 34,000 or so units have been proposed for construction.
The five hottest submarkets based on rental rate growth and absorption represented a mix of inner-city and surrounding areas, per Apartment Data. Almeda/South Main showed the highest annualized growth percentage, followed by Sharpstown/Westwood, Memorial/Spring Branch, Dickinson/Galveston and Greenspoint/Aldine.
Galveston has seen the fastest rent growth in the metro, Apartment List reported, with a year-over-year increase of 10.9%. Rents there are still significantly lower than in Houston, however, with a median one-bedroom rent of $980.