Robert Fiederlein, our Vice President of Planning and Infrastructure and in-house real estate expert, expertly curates the North Houston District’s Commercial Real Estate Market Reports. These reports deliver hyperlocal insights, offering a detailed view of market trends and shifts within the North Houston District’s boundaries. Gain an insider’s perspective on industrial, office, retail, and multifamily dynamics, all tailored to the unique characteristics of our area.
Multifamily Starts Drop Dramatically – A Precursor to Future Rent Growth
By Robert Fiederlein, Vice President, Planning & Infrastructure
Often times, graphs and charts can make a point better than words. In this quarter’s CRE report I am going to let the graphs and charts make the point with just a little narrative to go along with it.
For Q4 2024, the main point is the classic principle of economics – supply and demand and its impact on prices. As we all know the principle is that as supply tightens and demand either stays strong or grows, prices rise. The first half is well underway both nationally and locally in the multifamily market and the latter, in the form of rent growth, is perhaps just around the corner.

Chart 1
Source: CoStar, November 2024
Nationally multifamily starts are at their lowest in over 5 years and have declined for 6 straight quarters going back to Q1 of 2023 (Chart 1). Nowhere has this been more dramatic than in Houston (Chart 2). In Houston, per CoStar data, starts have dropped a whopping 97% from Q1 of 2022 to Q3 of 2024, from 9,200 units to 300 units. Austin and Dallas-Fort Worth have seen similar drops but not quite as dramatic as Houston’s drop.

Chart 2
Source: CoStar, November 2024
Annual rent growth appears to have hit bottom in Houston in recent quarters, settling out at just under 1%. CoStar projects a base case of rent growth over the next two years plateauing out at around 2.8%, slightly above long-term trend (Chart 3).

Chart 3
Source: CoStar, December 2024
A harbinger of future rent growth is that for the fourth month in a row the number of Houston apartment complexes offering concessions has dropped (Chart 4).

Chart 4
Source: CoStar, October 2024
Relative to demand, employment in the Houston region appears to be around 60,000 for 2024 (Chart 5). This is about trend for Houston when you exclude boom and bust years. This level of employment should provide healthy demand for apartment units.

Chart 5
Source: U.S. Bureau of Labor Statistics, November 2024
The above trends are evident in the North Houston District as well. The District presently counts 80 complexes totaling just under 19,000 units within its boundaries. Annual rent growth appears to have bottomed out in mid-2024 and ticked up slightly from 1.4% to 1.5% from Q2 to Q3. In short, similar to national trends, the North Houston District multifamily market appears well on its way to a robust next several years.
Questions? Connect with us.
Robert Fiederlein
Vice President Planning and Infrastructure
Direct: 281-874-2132
Mobile: 713-816-5413
rfiederlein@northhouston.org