May 2, 2018
Strong population growth and an improving economy have buoyed the Houston multifamily market, even as people begin moving back into their homes following Hurricane Harvey. The multifamily sector has been in recovery over the last few quarters and is poised to continue its positive momentum in 2018.
Houston absorbed approximately 3,000 units in the first quarter, leading to occupancy gains across all multifamily classes. As a result, market-wide occupancy ticked up to 89.7 percent. Class A apartments accounted for nearly half of all absorption in the first quarter, alluding to improvements in the local economy.
Strong demand and slowing construction in recent quarters have resulted in rising prices and fewer concession packages for tenants. Rental rates increased 4.5 percent quarter-over-quarter with the market-wide average asking rent settling at $1,022 per unit.
Only 986 units delivered during the first quarter but with approximately 10,000 units under construction, we can expect higher deliveries throughout the year.
Looking forward, occupancy levels are likely to continue their current trajectory to hit stabilized level of 90 percent.
View our Q1 2018 multifamily market report here.