Rental rates are up 6.6% since the start of 2021 at apartments across the Greater Houston area and up 5.6% over the last three months alone, according to a July 6 report from ApartmentData.com.
The average effective monthly rent of $1,116 in June topped every other month over the past two years, according to the report. The effective monthly rent—which is measured as the rental cost after concessions and utility adjustments are taken into account—was at $1,060 per month in March 2020, prior to the coronavirus pandemic.
The recent increase also comes after some submarkets in Houston’s Inner Loop saw drops in rent of as much as 16% at the end of 2020.
Meanwhile, apartment occupancy rates hit 90.7%, also a high mark over the past two years, according to the report.
Prior to the pandemic, occupancy rates were around 89%. Class A units, which saw the steepest drop, fell as low as 80% in June 2020 before rebounding to 86.4% in June 2021.
For the third straight month, more than 5,000 apartment units were absorbed, according to the report, meaning 5,000 more people in the Houston area moved into an apartment unit than moved out of one in each of those months. Prior to April, absorption did not top 2,800 in any month in the previous two years.
The Heights-Washington Avenue and the Montrose-Museum-Midtown submarkets have seen the biggest increases in rental rates over the past 12 months with 37.4% and 36.2% annualized growth, respectively. The 50-unit Avondale Highline in Montrose, which opened in October, is 99% leased, according to the report. A handful of other area projects that opened during the pandemic are more than 70% leased, including the 318-unit Driscoll at River Oaks, the 337-unit 15th Street Flats and the 363-unit Taylor Heights.
About 38% of units in Houston are offering concessions, which typically come in the form of move-in specials, free months or floorplan specials. That number is down from 45% in the monthly report released in early May by ApartmentData.com.
All statistics in each monthly report are derived from an ongoing survey of all apartment communities in the Houston area. Although Houston rental rates are on the rise, they remain behind Dallas-Fort Worth and Austin rates, which were measured at $1,273 per month and $1,422 per month, respectively.
Apartment construction activity also carried on in Houston’s Inner Loop during the pandemic.
Units constructed in past 12 months: 1,546
Units under construction: 2,087
Highland Village-Upper Kirby-West U
Units constructed in past 12 months: 1,317
Units under construction: 0
Med Center-Braes Bayou
Units constructed in past 12 months: 338
Units under construction: 607
Units constructed in past 12 months: 2,544
Units under construction: 1,264
Publication: Community Impact