• In Q2, Houston’s multifamily market was negatively impacted by COVID-19 and the ensuing economic downturn. The average effective rent fell 1.3% and occupancy declined 40 basis points.
  • The softening market conditions are a concern to all industry players, but so far, Houston’s market has held up better than many had expected given the weak energy sector on top of the impact from COVID-19 and the broader economy.
  • Houston achieved positive net absorption in Q2—2,054 units—bringing the H1 total to 4,397 units. However, more than 14,000 units were completed in H1. With nearly 19,000 units in the pipeline and ongoing economic challenges, market conditions are expected to decline further in Q3.
  • Class A multifamily is experiencing more downward movement in rents than the other classes. In Q2, Class A rents fell 3.7% compared to Class B’s 0.9% decline and smaller declines in Class C and D. The large supply of recently delivered units is impacting the Class A sector.
  • The suburban submarkets have generally maintained rent and occupancy levels better throughout Houston. A few suburban submarkets were able to achieve modest rent gains in Q2.