Take a white-hot job market and mix it with a sizzling gastronomic scene and vanguard arts and culture. Combine all of that with a range of housing options, spacious living and downright affordability for renters, and you just might find yourself in Houston.
With a diverse population of over 7.2 million, the Greater Houston region stands as the fifth-largest metro in the nation. Despite its notoriety for stiflingly hot summer temperatures, infamous urban sprawl and a baffling lack of zoning regulations (more on that later), Houston continues to rake in newcomers from in and outside of the Lone Star State.
Last year, the Houston-Woodlands-Sugar Land area welcomed the arrival of almost 125,000 transplants, positioning itself as the second-fastest-growing large metro nationally, according to data from the Greater Houston Partnership.
Whether you’re feeling the pull of Bayou City from out yonder, or you’re a local on the hunt for a new apartment, Rent. has unpacked the data and is ready to help you make moves.
Rents remain relatively affordable
Here’s the takeaway: since last year, average rents in H-Town took a dip, with median prices falling more than $12, from $1,746 in 2022 down to $1,733 today, marking a -0.7 percent. annual change, according to Rent.’s internal data.
This modest price drop is notable, as it bucks a national trend of steadily rising rents since February. According to Rent.com’s September 2023 Rent Report, the median price of an apartment nationally is $2,052. Statewide, median rents in Texas currently stand at $1,476.
When compared to its major metro counterparts, Houston remains a steal, earning a reputation as one of the most affordable big cities in the nation. Comparatively, rents in the New York Metropolitan area stand at more than double those of Houston, currently at a staggering $4,399.
And on the other coast, in Los Angeles — another sprawling port city boasting spacious living, professional sports franchises and a breadth of cultural diversity, median rents are at $3,655.
Notably, Houston has not been prone to dramatic price swings experienced in other rental markets. Between 2019 and 2023, rents saw a modest uptick from $1,662 to $1,733, an overall change of 4.26 percent and an annual rise of 1.06 percent.
Eyeing three-year averages, rent prices in Greater Houston saw a slight drop amid the COVID-19 pandemic, hitting $1,623 in 2020. Fast Forward to today, rents have experienced a 6.78 percent overall increase with a modest annual growth of 2.26 percent.
Between the summers of 2021 and 2022, prices climbed steadily from around $1,650 to $1,750. While currently making a rebound, a downward trend since last summer's peak could be an indicator that rents may continue to drop through the fall and winter.
Waiting out the mortgage market
According to experts, one reason Houston's rental market has maintained its dynamism and affordability owes to sticker shock among prospective homebuyers. According to housing market data from Redfin, the median price of a home in Houston was $335,000 last month, up 4 percent since last year. High mortgage rates, currently hovering around 7.1 percent for a 30-year fixed rate, are also contributing to tepid buyer interest.
For now, prospective buyers have put their home-ownership dreams on ice, waiting for more favorable rates while biding their time in the rental market.
Greater Houston is seeing a spike in leasing activity for condos, townhouses, and notably, for single-family homes, which saw a 12 percent increase in leasing in 2023. Year-on-year, there were a total of 4,096 leases signed compared to 3,656 in 2022, according to data from the Houston Association of Realtors, or HAR.
“New listings of rental properties have more than met demand as many would-be buyers have opted to rent because of elevated mortgage rates and general affordability concerns. The ample supply of rental homes has helped avert spikes in leasing rates," said HAR chair, Cathy Treviño.
In the first seven months of 2023, the City of Houston issued $2.534 billion in residential permits, up 21.9 percent from $ 2.079 billion in 2022.
Appraising the numbers of multi-unit residences constructed in major U.S. metros, Houston takes the lead with a total of 7,671 units built this year. By contrast, Los Angeles built 5,443, while Atlanta saw 5,790 constructions, according to Chamber of Commerce data.
Meanwhile, Houston builders are pulling the brakes on the construction of single-family homes. In January of this year, 2,692 housing permits were granted for detached single-family homes, a 40 percent drop from the 4,469 issued in early 2022, according to U.S. Census data.
Another reason Houston's rental market has held steady, according to experts, is because it's blessed with space and is taking advantage of the legroom. With the capacity to build outward from its urban core into attractive suburbs like Sugar Land and Katy, plus robust economies, strong schools and high quality of life, Greater Houston has been able to keep up with soaring demand.
“Houston is unique because it consists of such a sprawling metro with a plentiful supply of land that has steadily been developed for new housing, and that is not something other markets necessarily have access to," said Treviño.
Lack of zoning drives expansion
Depending on who you ask, one major driver of Houston's breakneck expansion is its lack of zoning. As the only major U.S. city to lack explicit zoning ordinances, a wider spectrum of housing stock is built at rates that outpace some of the largest metros elsewhere in the country.
While creating a sometimes mystifying hodgepodge of single-family homes jumbled together with retail spaces, apartment complexes, empty lots and municipal parks, the lack of traditional zoning rules has allowed Houston developers to churn out more housing, which in turn has kept prices stable — even amid such high demand.
As for vacancy rates in Greater Houston, they too have remained stable. In Q1 of 2022, vacancies were at 9.7 percent, while in Q2 of this year, they rose to 9.9 percent, according to Census data.
The national rental vacancy rate is currently at 6.3 percent, up from 5.6 percent a year prior. Inbound migration deltas are on the ascent in the Houston region, rising from -6.91 percent in Q1 2022, to 12.61 percent, a 282 percent uptick.
The takeaway
With its seeming immunity to dramatic price swings and a stellar capacity to meet soaring demand, the Bayou City — with a gold mine of big city amenities, an abundance of legroom and deep-cut prices relative to its urban counterparts — is standing out as a clear option for a broad array of renters and future home buyers.
