Monthly multifamily market intelligence for local, state, national, and global context. Published by NVest Analytics. Every figure is sourced and dated.
October 2026
Houston MSA. Multifamily
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The Month in Three Parts
How We Got Here
Houston's 2026 supply wave was smaller than Austin's or DFW's, but Q2 vacancy still hit 11.1%, up 70 basis points year over year, with effective rent $1,312 down 2.3% [1].
National construction cooled to 475,000 units, 3.5% of inventory, while agency 5-year quotes moved from 5.14 to 5.29% in March toward 6.07% on Aug 31 [2][3].
The 10-year Treasury reached 5.24% on Oct 1, up from 4.78% on Sep 4, and the 30-year mortgage hit 7.28% in the week of Oct 1 [4][5].
The Fed lifted the target range to 3.75 to 4.00% on Sep 16 in a unanimous vote, after futures had priced a possible increase [6][7].
Texas job growth slowed to 1.6% year to date through July after 1.9% annualized in H1, below the 2% long-run average [8][9].
Where We Are Now
Conventional occupancy reached 89.1% in September, up 0.8 points year over year, while effective rent of $1,329 was down 1.2% [10].
Demand is ahead of supply: 8,377 units absorbed year to date through Q2 against 8,232 delivered, with Q2 absorption of 6,177 nearly triple Q1 [1].
The pipeline is emptying: 11,756 units under construction, down 20.8% from Q1 and 36.4% from a year ago [1].
Inflation remains above target: July CPI 3.4% with core 2.5%, and August PCE 3.4% with core 3.0% [11][12].
SOFR is 3.87% on Oct 1, the 30-year mortgage is 7.28% for the week of Oct 1, and agency 5-year debt was 6.07% on Aug 31 [13][5][3].
Pricing is still tight: average cap rate 5.6% versus 6.07% agency debt, about 47 basis points of negative leverage, while H1 sales totaled $362.2 million across 65 deals [14][3][1].
Where We're Headed
Futures price about an 86% chance the Fed holds on Oct 27 to 28 after the Sep 16 hike; a 5.24% 10-year Treasury keeps refinance math tight [15][6][4].
2027 completions are forecast near 5,600 units, the lowest in nearly 15 years; with absorption above deliveries, vacancy should keep easing into 2027 [16][1].
Deal flow picked up: the 573-unit Resia Ten Oaks sale reported Oct 1, Park Row's 360-unit groundbreaking Sep 21, and Artis Montrose's 330-unit top-out Sep 3 [17][18][19].
The Dallas Fed cut 2026 Texas job growth to 1.7% on Aug 21; Brent $96.02 and WTI $91.48 on Sep 1 support Houston energy payrolls [8][20].
Expect occupancy gains to reach rents by early 2027, while debt priced above cap rates keeps Houston cap rates near current levels [10][16][3].
What It Means for Houston
Refinance math has tightened. The Fed raised to 3.75 to 4.00% on Sep 16 and the 10-year Treasury hit 5.24% on Oct 1; Houston owners with 2026 or 2027 maturities should model agency debt near 6.07% from Aug 31, not cuts [6][4][3].
Houston fundamentals are improving. Conventional occupancy reached 89.1% in September, up 0.8 points year over year, while effective rent of $1,329 was down 1.2%; absorption of 8,377 units passed 8,232 delivered through Q2 [10][1].
Supply is the tailwind. Under construction fell to 11,756 units, down 36.4% from a year ago, and 2027 completions are forecast near 5,600, the lowest in nearly 15 years, so vacancy should keep easing if demand holds [1][16].
Quality deals are clearing. First-half volume reached $362.2 million across 65 transactions at about $230,800 per unit, and late-September activity included the 573-unit Resia Ten Oaks sale plus Park Row and Artis Montrose milestones [1][17][18][19].
Texas growth still matters. Texas job growth slowed to 1.6% year to date through July and the Dallas Fed cut 2026 to 1.7%, but Houston gets support from energy payrolls and a metro population up 1.6% to 7.90 million [8][20][21].
National rates set Houston's floor. The Sep 16 hike, SOFR at 3.87% on Oct 1 and a 7.28% 30-year mortgage keep U.S. borrowing costs high; for Houston, that favors holding leverage low and letting occupancy gains reach rents [6][13][5][10].
Global yields reach Houston too. The U.S. 10-year was 5.24% on Oct 1 while the UK gilt was 4.92% Sep 30, Germany 3.60% and Japan 3.09% Oct 1; higher global yields can keep Houston debt costs elevated [4][22][23][24].
Houston Multifamily
Houston's apartment market is tightening. Conventional occupancy reached 89.1% in September, up 0.8 points from a year ago, while effective rent of $1,329 was down 1.2% [10]. Second-quarter absorption of 8,377 units passed the 8,232 delivered, and the construction pipeline shrank 36.4% from a year ago to 11,756 units [1]. Rent growth should follow as supply thins: about 5,600 units are forecast to deliver in 2027, the lowest in nearly 15 years [16].
Northwest Houston is 16% of regional sales; Southeast also active [16]
Rent trend by submarket, year over year
East End +2.8%; South Central +2.6%; Northeast +1.9%; metro -2.3% [1]
Inner-loop and east side leading; Class B and C flat [16]
Houston Submarket Snapshot
The largest cities in the Houston-The Woodlands-Sugar Land, TX metro. Rent and rent growth from Apartment List (Sep 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 Aug Census BPS [28]
2026 permit pace vs. 2025 annualized
Baytown
$1,275
-6.7%
0
0
n/a, no 2025 permits
Conroe
$1,245
-2.9%
6
0
-100%
Houston
$1,269
-2.3%
4,988
2,541
-24%
La Porte
$1,337
-4.3%
0
0
n/a, no 2025 permits
Pasadena
$1,266
-1.0%
0
0
n/a, no 2025 permits
Pearland
$1,559
+0.6%
0
0
n/a, no 2025 permits
Texas City
$1,256
-1.2%
0
0
n/a, no 2025 permits
Webster
$1,329
-0.4%
0
0
n/a, no 2025 permits
Houston Transactions and Deal Flow
Houston's deal flow picked up at the end of September. The largest trade was Resia Ten Oaks, a 573-unit, 2024-vintage community in West Houston bought by a partnership of Spirit Investment Partners and Strategic Value Partners [17]. Developers stayed active: OHT Partners broke ground on the 360-unit Park Row in the Energy Corridor [18], and Southeastern topped out the 330-unit Artis Montrose [19]. First-half volume reached $362.2 million across 65 transactions at about $230,800 per unit [1].
Financing costs moved up into October: the 30-year home mortgage rate hit 7.28% in the week of Oct 1, up 57 basis points from 6.71% on Sep 3, and the 10-year Treasury yield reached 5.24% on Oct 1 [5][29][4]. Agency lending remains the workhorse for apartment deals, with a combined $176 billion purchase cap for 2026 and half of volume required to be mission-driven[30]. SOFR stood at 3.87% on Oct 1, keeping floating-ratebridge money near 6 to 8% [13].
Agency Multifamily Rates, 2026 Trend
Indicative 5-year agency fixed rate at each dated quote. Hover the points.
Texas gave back some of its second-quarter momentum. Employment grew 1.9% annualized in the first half [9], but payrolls fell 0.1% annualized in July, pulling year-to-date growth to 1.6%, below the state's 2% long-run average [8]. The Dallas Fed cut its 2026 forecast to 1.7% on Aug 21, from 2.0% in July [8]. Manufacturing wage pressure eased in August, then the Dallas Fed wages index rebounded to 27.4 in September from 21.1 [34][35].
Costs and policy that hit Houston net operating income directly.
Factor
Status
Read-through
Property insurance
Texas FAIR Plan residential rate changes took effect Sep 1; the plan does not cover commercial multifamily properties [37]
First renewals at new rates land this quarter; apartment policies price separately
Property tax
2026 apartment appraisals: Harris County +7.9% to $65.6B, the largest commercial category [38]
Milder than Dallas (+19.6%) and Tarrant (+23.8%) [38]
Population and migration
Metro added about 127K residents in the year to Jul 1 2025, reaching 7.9M, up 1.6% [21]
Core demand driver for apartment 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 versus 21.6 million before the conflict [20]
Supports Houston and Permian energy jobs
Peer metros (Q2 2026)
DFW stabilized vacancy 9.6%, effective rent $1,470 with its first quarterly gain in over a year [39]. Houston stabilized vacancy 11.1%, rent $1,312, down 2.3% YoY [1]
Texas metros are stabilizing as supply pipelines shrink
National Rates and the Fed
The Fed raised its target range a quarter point to 3.75 to 4.00% on Sep 16 in a unanimous vote, the first hike since July 2023 [6]. The 10-year Treasury reached 5.24% on Oct 1, up from 4.78% on Sep 4 [4], and the 30-year mortgage hit 7.28% in the week of Oct 1 [5]. August PCE inflation ran 3.4% headline and 3.0% core [12]. After a weak September jobs report, futures price about an 86% chance the Fed holds at its Oct 27 to 28 meeting [15].
Sources: U.S. Treasury and Freddie Mac, monthly averages through Oct 1, 2026; FRED for the 10-year before 2026 [4][5][40]
Global Backdrop
Global bond yields moved higher again as central banks kept tightening. The U.S. 10-year Treasury yield was 5.24% on Oct 1 [4], with the UK gilt at 4.92% on Sep 30 [22], Germany at 3.60% [23] and Japan at 3.09% on Oct 1 [24]. The Federal Reserve raised its target range to 3.75% to 4.00% on Sep 16 [42], and the ECB deposit rate reached 2.50% on Oct 2 [43]. Higher global yields feed directly into U.S. borrowing costs.
10-Year Government Bond Yields
Where the U.S. sits vs. peers. Hover a bar for context.
Sources: U.S. Treasury, Oct 1; Bank of England, Sep 30; Deutsche Bundesbank, Oct 1; Japan Ministry of Finance, Oct 1 [4][22][23][24]
Global Policy and Risk Snapshot
Central-bank posture and macro risks that feed into borrowing costs.
Factor
Status
Why Houston cares
European Central Bank
Deposit facility 2.50% on Oct 2, raised from 2.25% effective Sep 16 [43][44]
The second ECB increase of this cycle; keeps global yields anchored higher
Disclosures. Compiled Oct 2, 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. Not investment advice.
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