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Houston single family leases up 25% as potential buyers weary of sales market
New single family rental listings in Houston are up 29%
Houston’s would-be homebuyers could be turning to the single family rental market for some relief from the Bayou City’s aggressive sales environment.
With mortgage interest rates continuing to climb and the inventory of homes for sale still at historically low levels, Houstonians looking to rent a single family home are finding a market that has more supply.
Single-family home rentals in Houston jumped 24.8 percent year-over-year, with the average rent up 11 percent to an all-time high of $2,239, according to the Houston Association of Realtors’ latest rental market report.
Houston single family renters signed 3,407 leases in May 2022 versus 2,731 in May 2021.
New single-family rentals listings in Houston were up 28.6 percent in May. The time it took to lease a home rose to 24 days from 22.
Despite looming interest rate hikes and a possible recession, real estate investors especially in the Sun Belt remain eager to supply the single family rental market, where household formation is high and jobs continue to be plentiful.
Even builders are trying to cash in on single family rental homes in Texas and the South with a number of build to rent communities coming online in recent years and others in the pipeline.
Houston renters weren’t as interested in townhomes and condominiums for rent in May.
Those properties saw leases fall 6.7 percent year-over-year, with 616 units leased in May 2022 compared to 660 in May 2021. Still, rents rose 13.2 percent to $1,949, slightly below the record high of $1,854 reached in March of 2022.
New listings of townhomes and condos were down 1 percent and their days on the market dropped to 31 days from 41.
“We are seeing a surge of activity in Houston’s rental market as prices of homes for sale and interest rates move beyond the reach of some consumers,” said HAR Chair Jennifer Wauhob with Better Homes and Gardens Real Estate Gary Greene. “For now, there appears to be an adequate supply of rental properties throughout the Houston market, but that could change if demand grows.”