Houston’s multifamily market remains strong despite recent fluctuations

Investment sales volumes in Houston have plummeted to their lowest point in a decade, a stark contrast to the record highs witnessed in 2022. This downturn coincides with a significant drop in sales pricing of -27.2% over the past year. Persistently high interest rates are a key culprit, making borrowing expensive and deals harder to finance.

As a result, a significant gap remains between buyer and seller price expectations, influenced by elevated interest rates and rising operational costs. However, high borrowing costs and inflation have pushed more potential home buyers toward renting, which could eventually lead to lower vacancy rates and faster growth in rental prices in 2025.

Despite experiencing significant fluctuations in recent years, Houston’s multifamily market fundamentals in the long term remain strong, with impressive population growth, strong in-migration, and rental rates lower than the national average positioning the market for a stable recovery.