Houston, TX Multifamily Market Report Q2 2026
Multifamily Investors Chase Houston’s Wide Cap Rates Growth Stays Underwater
Demand
Rent is still loosing ground. Effective rent fell to $1,327 in Q2, down 1.0% YoY, the second straight year of outright decline. But the leasing numbers underneath that headline look considerably better. Net absorption of 8,957 units ran nearly 49% ahead of last year’s pace, enough to pull vacancy down to 6.19%, even though it’s still up 44 bps from a year ago. That’s the split defining Houston right now, a market absorbing units at a healthy clip while still working off enough excess supply that pricing power hasn’t caught up.
Supply
The delivery pipeline is unwinding. The TTM completions dropped 38.4% to 11,542 units, a steep comedown from the 24,869 delivered at the peak of the cycle in 2024. Curiously, Q2 completions actually rose 37.5% YoY to 3,443 units. However, units under construction have fallen to 21,129, just 2.63% of inventory, the lowest share since well before the current cycle began.
Investment Market
Houston is drawing capital back for a simple reason: it’s one of the widest cap rate markets in the nation. At 6.28%, Houston’s cap rate trails only Columbus, and it’s climbed for eight straight quarters even as price per unit has edged up alongside it to $142,420. TTM volume is up 19.4% to $6.0B, through Q2 alone came in soft at $946M, down 38.6% YoY. This kind of choppy quarter-to-quarter volume that’s common when investors are still testing a market’s floor.
Volume
- $6.0B TTM volume (+19% YoY)
- Q2 2026: $946M
- Series peak $18.3B (2021)
Pricing
- Cap rate 6.28%
- Price per unit $142k
- Caps expanding 18 quarters running
