The Houston multifamily market is having a record year as pent-up demand for new apartments pushed leasing activity to an all-time high in the first two quarters, resulting in an overall occupancy above 90% for the first time in two years.
Leasing momentum is expected to remain strong due to strong market fundamentals that include:
- Unprecedented Leasing Activity — The Houston market absorbed more than 20,000 units through the first half of 2021, exceeding annual absorption for each year dating back to 2011.
- Strong Rent Growth — Effective rents have climbed above pre-pandemic levels to reach all-time highs.
- Shallow Pipeline — Developers are expected to deliver fewer units in 2021 than in the previous year, and that number is projected to fall even further in 2022 to just 6,000 new apartments — less than half of the market’s 10-year average annual delivery of 14,222 units.
- Rising Population — Houston has added more than 1.2 million residents since 2010, and the metro area is projected to experience the largest gross population gain in the U.S. from 2021-2026.
Sources: Apartment Development Services, Real Page, Greater Houston Partnership and the U.S. Census Bureau.