The rate of price increases for Houston area apartments lagged the rest of the nation at midyear, despite the region’s healthy economy and strong job growth, according to a new report by Yardi Matrix.
Rents in the Houston area rose 0.8 percent year-over-year, well below the national average of 3.2 percent, according to Yardi, a developer of investment and property management software for real estate companies. That placed Houston last in the ranking of 30 metro areas by annual rent growth at midyear.
Las Vegas, Phoenix and Sacramento, Calif., topped the list, with increases of 8.4 percent, 8.1 percent and 5.3 percent respectively.
The slowing rent increases are due in part to occupancy rates that have fallen back from the spike seen from those renters displaced following Hurricane Harvey, according to the report.
Houston is working through an increase in supply that seen 70,000 units come online between 2013 and 2018 in complexes with at lease 50 units, according to Yardi Matrix. The supply growth has slowed since the beginning of 2018, with the current rate of new deliveries falling to 1.2 percent annually through mid-year.
Among other Texas cities, Austin saw 4.9 percent rise in rents compared to the year earlier, while Dallas posted rent growth of 2.8 percent at midyear and San Antonio rents rose 3 percent.
A separate report from Houston-based ApartmentData.com showed a similar pattern in rent growth, with area rents rising 0.7 percent year-over-year in July.
In the past 12 months, 11,583 apartments were absorbed in the Houston area according to ApartmentData.com. That roughly matches the 11,491 apartments units that opened during the period.
Houston’s apartment occupancy rate of 92.6 percent as of May was the lowest of the top 30 metros and down 110 basis points year-over-year, Yardi Matrix said.
Publication: Houston Chronicle