Monthly multifamily market intelligence for local, state, national, and global context. Published by NVest Analytics. Every figure is sourced and dated.
September 2026
Houston MSA. Multifamily
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The Month 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 475,000 units, 3.5% of inventory and the lowest since 2013 [27][28].
Agency 5-year quotes ran 5.14 to 5.29% in March [40] before the 10-year Treasury climbed from 4.19% on Jan 2 to 4.78% on Sep 4 [1].
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 ran 1.6% annualized in the first seven months of 2026 after a flat 2025 (0.1%), below the state's 2% long-run average [221][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 July [36][216]. SOFR is 3.66% [35]. Brent is $96.02 and WTI $91.48 on Strait of Hormuz disruption, a direct plus for Houston payrolls [214].
Pricing gap: Houston average cap rate 5.6% [64] vs. agency 5-year debt at 6.07% [40]. That is negative leverage of about 47 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 about a 58% chance of a quarter-point increase on Sep 16, after peaking near 66% following the Jackson Hole speech [217]. If it lands, agency 5-year fixed rates extrapolate to roughly 6.2 to 6.3% [1][40].
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].
The Dallas Fed cut its 2026 Texas employment forecast to 1.7% (range 1.3 to 2.1%) on Aug 21 [221]; energy strength supports Houston specifically, with Brent at $96 [214].
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 4.78% mean the "wait for cuts" plan is over for 2026. Owners with loans maturing in 2026 or 2027 should model a refinance at 6.0 to 6.5% [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. 6.07% agency debt is still negative leverage [64][40].
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 (Aug 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 Jul Census BPS [208]
2026 permit pace vs. 2025 annualized
Baytown
$1,288
-6.1%
0
0
n/a, no 2025 permits
Conroe
$1,256
-3.0%
6
0
-100%
Houston
$1,268
-2.5%
4,988
2,109
-28%
La Porte
$1,348
-3.9%
0
0
n/a, no 2025 permits
Pasadena
$1,266
-0.6%
0
0
n/a, no 2025 permits
Pearland
$1,558
+1.3%
0
0
n/a, no 2025 permits
Texas City
$1,269
+0.7%
0
0
n/a, no 2025 permits
Webster
$1,343
-0.3%
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]. The last 30 days were dominated by deliveries and refinancings in the inner loop rather than trades.
Property
Submarket
Units
Buyer / Seller
Price / Cap
Reported
Artis Montrose
Montrose
330
Southeastern; topped out, a conversion of the former Disco Kroger site, occupancy late 2027
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. As of Aug 31 low-leverage agency loans price in the mid-5s and higher-leverage quotes sit just above 6% [40]. Across all multifamily products, quotes run 5.43% to 6.63% [220]. CBRE put the average multifamily loan spread at 162 basis points in Q2, 15 tighter than a year ago, with lenders competing on price rather than leverage [219]. 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 at 1.25x debt coverage and 65% loan-to-value, top of the published range. One source throughout. Hover the points.
Source: BWE Market Rates [40], one rate sheet at three dates (Jan 20, Mar 9 and Aug 31, 2026). Indicative levels only; Freddie Mac prices each loan individually and does not publish pricing.
Lending Landscape
Programs, caps, and terms relevant to Houston owners.
Texas gave back some of its second-quarter momentum. Employment grew 1.9% annualized in the first half, but payrolls fell at a 0.1% annualized rate in July, pulling year-to-date growth down to 1.6%, below the state's 2% long-run average. The Dallas Fed cut its full-year forecast to 1.7% on Aug 21, from 2.0% in July. Manufacturing wage pressure is easing: the Dallas Fed wages and benefits index fell to 21.1 in August from 30.8 in July.
Costs and policy that hit Houston net operating income directly.
Factor
Status
Read-through
Property insurance
Texas FAIR Plan rate changes took effect Sep 1 [10]
The first renewals at the new rates land this quarter. Multifamily policy quotes $3.2K to $9K per year [11]
Property tax
2026 apartment appraisals: Harris County +7.9% to $65.6B, the largest commercial category [69]
Milder than Dallas (+19.6%) and Tarrant (+23.8%) [49]
Population and migration
Houston #1 in U.S. +127K residents in the year to Jul 2025; metro 7.9M, up 1.6%; Harris County led all counties at +50K [65]
Core demand driver for absorption
Energy sector
Brent $96.02 and WTI $91.48 on Sep 1; Strait of Hormuz flows 4.9 million barrels a day in Q2 against 21.6 million before the conflict [214]
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. Futures now put a quarter-point increase at the Sep 15 to 16 meeting at about 58%, after the Jackson Hole speech pushed the odds as high as 66%. The 10-year Treasury closed Sep 4 at 4.78%, its highest of the year, and August payrolls came in at 162,000 with unemployment steady at 4.1%.
Sources: Federal Reserve [17]; U.S. Treasury, Sep 4 [1]; BWE rate sheet, Aug 31 [40]. Decomposition is illustrative; spreads vary by leverage, term, and borrower, and a 5-year agency loan is priced off the 5-year index, not the 10-year.
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 [191] and MORTGAGE30US [192], monthly averages of daily and weekly data, refreshed each build (2026-09-04).
Global Backdrop
Global bond yields moved higher again as central banks turned from cutting to tightening. The European Central Bank raised its deposit rate to 2.25% in June, the Bank of Japan reached 1.00% for the first time since 1995, and the Japanese 10-year crossed 3% on Sep 2. Energy prices are elevated on Strait of Hormuz supply disruption, 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: U.S. Treasury, Sep 4 [1]; Bank of England, Sep 2 [209]; Deutsche Bundesbank, Sep 4 [210]; Japan Ministry of Finance, Sep 3 [211]. All four are the issuing authority's own published series.
Global Policy and Risk Snapshot
Central-bank posture and macro risks that feed into Houston borrowing costs.
Factor
Status
Why Houston cares
European Central Bank
Deposit facility 2.25%, raised from 2.00% effective Jun 17, 2026 [212]
The first ECB increase of this cycle; keeps global yields anchored higher
Bank of England
Bank Rate 3.75%, held Jul 30; next decision Sep 17 [209]
Gilt yields still rising to 4.70%, an inflation worry [209]
Bank of Japan
Policy rate 1.00%, raised Jun 16 and held Jul 31 [213]. JGB 10-year 2.97%, above 3% on Sep 2 [211]
Less Japanese demand for Treasuries, so higher U.S. yields
Oil and energy
Elevated Brent $96.02, WTI $91.48 on Sep 1; Hormuz flows 4.9 million barrels a day in Q2 [214]
Plus for Texas jobs and royalties; minus for inflation and Fed posture
U.S. dollar
Index 99.16 on Sep 4, down 0.5% over the month and up 1.4% year to date [38]
A weaker dollar makes U.S. property cheaper for foreign buyers
Sources: European Central Bank [212]; Bank of England [209]; Bank of Japan [213]; Japan Ministry of Finance [211]; EIA [214]; Trading Economics [38].
BWE: Market Rates, as of Aug 31, 2026 (Fannie Mae DUS and Freddie Mac conventional fixed-rate ranges by term, DSCR and LTV tier); earlier BWE sheets as of Jan 20, 2026 and Mar 9, 2026 via the Internet Archive
Disclosures. Compiled Sep 4, 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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