Monthly multifamily market intelligence for Houston, with Texas, national, and global context. Published by NVest Analytics. Every figure is sourced and dated.
August 2026
Houston MSA. Multifamily
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The Week in Three Parts
How We Got Here
Houston's supply wave was smaller than Austin's or DFW's, but vacancy across all inventory still reached 11.1% in Q2 2026, up 70 basis points from a year ago [63].
Effective rents slipped to $1,312, down 2.3% year over year, with Class B and C flat for a year [63][46].
Nationally, construction fell to 3.5% of inventory, the lowest since 2013 [28].
Agency loan rates bottomed near 5.56% in early June [3] before the 10-year Treasury climbed from about 4.2% to 4.68% [1][14].
The Fed committee held rates at 3.50 to 3.75% on Jul 29, but three members voted to raise them [17][18].
Texas job growth returned to its 2% trend in the first half of 2026 after a flat 2025 (0.1%) [8][48].
Where We Are Now
Demand is running ahead of supply: 8,377 units absorbed year to date against 8,232 delivered, and Q2 absorption of 6,177 units nearly tripled Q1 [63]. Vacancy fell 40 basis points, the best quarter since 2021 [46].
Rents are flat to slightly down: -2.3% year over year on effective rent [63], though Class A rent growth is beating the market and East End, South Central and Northeast Houston are positive [46][63].
The pipeline is emptying fast: 11,756 units under construction, down 36% from a year ago [63].
Inflation is still above target: CPI 3.4% in July, PCE 3.7% in June [36][37]. SOFR is 3.65% [35]. Oil is elevated on Strait of Hormuz risk, a direct plus for Houston payrolls [16].
Pricing gap: Houston average cap rate 5.6% [64] vs. agency 5-year debt at 6.20% [4]. That is negative leverage of about 60 basis points.
Population is the engine: Houston led the nation with 127,000 new residents in the year to July 2025; Harris County led all U.S. counties [65].
Where We're Headed
Rates: futures markets price two quarter-point increases (Sep 16 and Dec) [18]. If they happen, agency fixed rates extrapolate to roughly 6.5 to 6.7% by year-end [1][4].
Supply: 2027 completions are forecast near 5,600 units, the lowest in nearly 15 years [46]. With absorption already above deliveries, vacancy should keep falling into 2027.
Sales are recovering: first-half volume $362 million across 65 deals, up 31% from 2025, at about $230,800 per unit versus $159,000 a year earlier [63][46]. Three institutional buys closed in the last 30 days [66][67][68].
Texas employment forecast is 2.0% (range 1.5 to 2.5%) [9]; energy strength supports Houston specifically [16].
Net: Houston has the best near-term supply-demand balance of the four Texas metros. Expect occupancy gains to show up in rents by early 2027, with higher debt costs keeping cap rates near current levels [46][63][18].
What It Means for Houston
The rate direction has flipped. Three Fed votes to raise rates and a 10-year Treasury at 4.68% mean the "wait for cuts" plan is over for 2026. Owners with loans maturing in 2026 or 2027 should model a refinance at 6.25 to 6.75% [1][17][18].
Houston's balance is the best in Texas. Absorption above deliveries year to date, the biggest vacancy drop since 2021, and a 2027 pipeline at a 15-year low [46][63].
Rents lag occupancy. Effective rent is still down 2.3% year over year and Class B and C are flat; only Class A and a few inner submarkets are growing [63][46]. Expect rent to follow occupancy with a two- to three-quarter lag.
Buyers are paying up for quality. Price per unit jumped to about $230,800 from $159,000 as 2020s-vintage assets traded [63][46]. Average cap rate 5.6% vs. 6.20% agency debt is still negative leverage [64][4].
Costs are rising but slower than DFW. Harris County apartment appraisals rose 7.9% in 2026 [69] versus 20%-plus in Dallas and Tarrant [49]. Insurance, especially wind and flood, is the bigger Houston line item [10][11].
Houston Multifamily
Houston is rebalancing faster than its Texas peers. Year-to-date absorption has passed deliveries, Q2 vacancy fell 40 basis points (the best quarter since 2021), and the under-construction count is down 36% from a year ago. Rents have not caught up yet: effective rent is down 2.3% year over year, with Class A the only segment clearly growing.
Sources: Apartment Loan Store [64]; Cooper Land Company [70]; Northmarq [46]. Class A and C ranges are national benchmarks by class, not Houston-specific quotes.
Houston vs. National Fundamentals
Hover a bar. Negative means rents are falling.
HoustonUnited States
Sources: Cushman and Wakefield [63]; Northmarq [46]; Apartment List [25]; CBRE [26]; Cushman and Wakefield U.S. [27].
Northwest Houston is 16% of regional sales; Southeast also active [46]
Rent trend by submarket, year over year
East End +2.8%; South Central +2.6%; Northeast +1.9%; metro -2.3% [63]
Inner-loop and east side leading; Class B and C flat [46]
Houston Submarket Snapshot
The largest cities in the Houston-The Woodlands-Sugar Land, TX metro. Rent and rent growth from Apartment List (Jul 2026); multifamily units permitted (buildings of 5+ units) from the Census Building Permits Survey. Permits lead construction by 12 to 24 months. Rows alphabetical; hover a row for detail.
MF units permitted, 2026 through Jun Census BPS [208]
2026 permit pace vs. 2025 annualized
Baytown
$1,298
-4.6%
0
0
n/a, no 2025 permits
Conroe
$1,261
-2.7%
6
0
-100%
Houston
$1,264
-2.8%
4,988
1,182
-53%
La Porte
$1,360
-3.3%
0
0
n/a, no 2025 permits
Pasadena
$1,275
+0.5%
0
0
n/a, no 2025 permits
Pearland
$1,554
+1.1%
0
0
n/a, no 2025 permits
Texas City
$1,255
+0.3%
0
0
n/a, no 2025 permits
Webster
$1,351
+0.2%
0
0
n/a, no 2025 permits
Houston Transactions and Deal Flow
Sales are recovering: first-half volume of $362.2 million across 65 transactions, up 31% from 2025, at about $230,800 per unit as newer assets traded [63][46]. Three institutional acquisitions closed inside the last 30 days.
Property
Submarket
Units
Buyer / Seller
Price / Cap
Reported
Ashton on West Dallas
Montrose / Inner Loop
246
RPM Living; acquisition financing from Amerant Bank
Agency lending (Fannie Mae and Freddie Mac) remains the workhorse: a combined $176 billion cap for 2026, half of which must go to affordable housing. Low-leverage agency loans price in the mid-to-high 5s as of Aug 24; higher-leverage quotes are in the low 6s. Bank bridge money runs SOFR plus 225 to 325 basis points, debt funds SOFR plus 300 to 450.
Agency Multifamily Rates, 2026 Trend
Freddie Mac indicative 5-year fixed. Hover the points.
Sources: Select Commercial [3]; Apartment Loan Store [4]. Different quote sources; treat as indicative.
Lending Landscape
Programs, caps, and terms relevant to Houston owners.
The Texas economy strengthened in the second quarter. Employment grew at a 1.9% annualized pace in the first half after a flat 2025 (0.1%), hiring accelerated in June and July, and the Dallas Fed raised its full-year forecast to 2.0%. Wage pressure is broadening: manufacturers report 4.8% wage growth, the fastest since 2023.
Supports Houston and Permian jobs; direct Houston benefit
Peer metros (Q2 2026)
DFW rents -1.6 to -2.1% YoY, vacancy 7 to 12.2% [22][20]. Austin rents +1.3% in Q2, first gain since 2022 [45]. San Antonio occupancy 93.1% [47]
All four Texas metros are turning at the same time
National Rates and the Fed
The Fed held at 3.50 to 3.75% in July with an unusual three-member vote in favor of raising. Markets are now pricing two quarter-point increases, September and December. The 10-year Treasury finished Aug 14 at 4.68%.
Sources: Federal Reserve [17]; U.S. Treasury [1]; Select Commercial / Apartment Loan Store (Aug 21) [3][4]. Decomposition is illustrative; spreads vary by leverage, term, and borrower.
10-Year Treasury vs. 30-Year Mortgage Rate, 1980 to today
Why apartments rent: the mortgage rate sets the cost of buying a house, and the gap between it and the Treasury is the part of that cost the market has added since 2022. Monthly averages, percent. Lower panel: mortgage rate minus Treasury, in percentage points. Hover for any month.
Sources: FRED series DGS10 [205] and MORTGAGE30US [206], monthly averages of daily and weekly data, refreshed each build (2026-08-26).
Global Backdrop
Global bond yields moved higher this month as traders scaled back expectations for 2026 rate cuts. Energy prices are elevated on Strait of Hormuz supply risk, which helps Texas producers but adds to inflation.
10-Year Government Bond Yields
Where the U.S. sits vs. peers. Hover a bar for context.
Sources: ETF Trends / U.S. Treasury (Aug 14) [1]; Trading Economics [14]; FXStreet [15]; Euronews (Aug 17) [39]. UK and Germany approximate.
Global Policy and Risk Snapshot
Central-bank posture and macro risks that feed into Houston borrowing costs.
Disclosures. Compiled Aug 24, 2026 from publicly available sources; figures are as reported by each source on the date shown and have not been independently verified. Where sources conflict, the range is shown. Items marked "Data unavailable" were not published or not captured in the period. Not investment advice.
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