Houston Multifamily Market Report
Rental Demand Underpinned by Strong Household Formation;
Pockets of Supply Overhang Likely
Apartments capture household formation as home prices soar. Over the past five years roughly 212,000 households were created in Houston, ranking the metro as second among major U.S. markets behind only Dallas/Fort Worth. This trend is expected to accelerate over the next five years, resulting in the formation of an additional 240,000 households through 2025. After the median home price jumped by 13.4 percent last year to $281,800, many people searching for residences will opt to rent. The suburbs in particular are garnering more attention from tenants who are prioritizing space after the rapid adoption of remote work and the quarantine experience. Net absorption in the suburbs totaled 12,270 units last year, led by the Katy submarket, where a net of 3,270 doors were leased.