Houston 1st In The Country For 2-Bedroom Rent Increases, 3rd For Absorption
Multifamily rents are declining in the U.S., but Houston units are thriving.
Rents for two-bedroom apartments in Houston grew 4.1% in April, the most in the nation, bringing average monthly rent to $1,549, according to Abodo research. One-bedroom units didn't fare quite as well, increasing only 0.71% last month, but that is still beating the national average.
Across the U.S., rents have dropped 2% so far in 2018.
Abodo attributes the jump to warm weather in Houston. Denton and Dallas both also made the top 10 for two-bedroom rent increases (2.8% and 2.3%, respectively).
Houston also had the third-largest rate of apartment absorption in the U.S. in Q1, Berkadia reports. Demand outpaced deliveries by more than two-to-one — with 2,971 units absorbed in Q1, Houston sits behind only Dallas and New York City.
“Houston is really exceeding expectations and outperforming many other multifamily markets across many metrics,” Berkadia Senior Managing Director Ryan Epstein said. “Investment activity reflects these more healthy dynamics, and we anticipate this trend to continue as the Houston area economy continues to see growth.”
Hurricane Harvey also helped Houston's multifamily market, and the sector is staying healthy even as displaced residents have returned to single-family homes.
One driver — rents take just 19% of residents' income in Houston, lower than the national average of 26.3%, according to Berkadia.