As summer blazes in the Lone Star State, Houston’s single-family rental market is experiencing a red-hot surge of its own. July was not only the hottest month on record temperature wise, it was also the Bayou City’s hottest month on record for leasing.
After significant gains in June, the market saw new highs in July with single-family leasing activity increasing 19 percent year-over-year, according to the Houston Association of Realtors. Renters signed 4,400 leases last month, up from 3,700 in July 2022.
In June, Houston saw a 13 percent decrease in single-family home sales while single-family rentals increased by 16 percent year-over-year.
Driven by growing concerns regarding affordability and interest rates, home sales across the Space City were down for a 16th straight month in July as leasing activity boomed.
Single-family home sales dropped 9 percent year-over-year in July, the smallest decline logged since last year. Potential buyers are coming around to the idea that inflated interest rates are here to stay.
“Each passing month has moved the Houston housing market closer to what we consider normal, with seasonal influences, but consumers are still understandably taking a cautious approach to the homebuying process, and many are ultimately choosing to rent,” wrote Cathy Trevino, HAR chairwoman, in a media release.
As demand for rentals increases, so does supply. July also saw a nearly 12 percent hike in rental inventory, increasing from 4,900 to 5,500 year-over-year. Rent prices were also up year-over-year, but only slightly, showing why residents continue to opt for these cost-effective options. The average rent increased by $68 year-over-year from $2,295 to $2,363 in July.
The appetite for rental homes extended beyond detached houses, with townhomes and condos also experiencing robust demand. Leases for townhomes and condos grew by 4 percent, reaching 716 units leased compared to 689 in July 2022.
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