After 2.5 Years Lagging The U.S., Houston Multifamily Rent Growth Is Back

Houston multifamily rents, February 2015-February 2018
Courtesy of Yardi Matrix
Houston Multifamily Rents, February 2015 To February 2018

The bottom fell out of rent growth in Houston apartments in May 2015. For years leading up to that point, the Bayou City had been surpassing the national average in apartment rents. But starting with the oil bust of 2014, Houston lost traction, and around the midpoint of 2015, fell below the U.S. in terms of rent growth, Yardi Matrix data shows.

No more. After hitting a trough in May 2017, rent growth has been leaping, and as of February, Houston is back above the 2.7% national average, with a 2.9% year-over-year increase through that month. Hurricane Harvey helped buoy the multifamily market, but it goes deeper, as the rebound began before the storm and has continued as short-term leases for displaced residents have burned off.

Higher-end properties are leading the way, posting 3.2% rent increases from February 2017 to February 2018. But it was widespread improvement — Yardi found that rents increased in 90% of Houston's submarkets. Magnolia led the way, with 9.1% rate leaps.

The rent trajectory closely follows Houston's employment growth, which dipped below the national average in Q3 2015, troughed in late 2016 and is now close to the national average again. It closed out 2017 with job growth only 20 basis points below the U.S.

About 3,600 units have delivered this year in Houston, and more than 14,000 units are under construction, Yardi reports. Almost a third of those are concentrated in West End/Downtown. The firm expects apartment rents to rise 2.3% overall in 2018.

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's Houston Newsletters
Related Stories

Bugatti Lends Brand To 60-Story Miami Condo Tower

With Occupancy Brimming, Investors Pile Into Bay Area Apartments

FBI Drops Investigation Into Financially Troubled StoryBuilt

GTIS Partners Rebrands As Brightshore Capital, Launches $250M Debt Platform

Dublin BTR Had A €1B Summer

Sales Of Lower-End Apartments Surge In Philly As Landlords Face Financial Issues

Wu Proposes Tax Breaks To Jump-Start Stalled Housing Projects

Developer Seeks Permit For Denver Energy Center Conversion Project

Airbnb Launches $250M Fund To Invest In Affordable Housing

DFW Multifamily Distress Creates Opening For Investors As Development Slows

Security Tech Firm Plans Loudoun HQ Move: The D.C. Deal Sheet

16K SF Restaurant, Event Space Opens At 5POP Office: The Houston Deal Sheet