Houston’s Fundamentals Stay Solid
Houston’s rental sector showed resilience, boosted by the recovery of jobs lost during the pandemic. Although the economy posted a slower expansion in 2022, it moved steadily upward. The multifamily market presented a similar sturdiness—increased transaction activity, robust supply additions and steady rent gains. Rent growth and occupancy rates showed signs of moderation, with rates inching up 0.3% on a trailing three-month basis through October, to $1,327, and occupancy down 60 basis points in the 12 months ending in September, to 93.6%.
Houston unemployment stood at 4.2% in September, according to preliminary data from the Bureau of Labor Statistics, lagging the state (4.0%), the U.S. (3.5%) and the other major Texas metros. Still, the metro’s rate rose 130 basis points from the start of the year. The job market expanded by 6.0%, or 191,900 jobs, in the 12 months ending in August, with just the government sector losing jobs (1,800 positions). Mining, logging and construction led gains (42,500 jobs), as even though the metro’s dependency on the energy sector loosened, the global energy crisis boosted operations.
Developers delivered 13,740 units through October and had another 29,000 under construction, half of which broke ground in 2022. Meanwhile, investment volume rose to $9 billion, with robust activity during the first two quarters. Increased competition pushed the price per unit up 10.2%, to $155,438 in October.
Read the full Matrix Multifamily Houston Report-December 2022