Despite challenging economic conditions, Houston’s multifamily fundamentals persisted, though not without some impact. Bucking the national trend, rent growth was positive, although rates remained stagnant, at $1,353 in October. Meanwhile the U.S. average slid 0.1 percent on a trailing three-month basis, to $1,718. The occupancy rate in stabilized properties also remained flat, at 93.4 percent in September.
Unemployment stood at 4.4 percent in September, according to preliminary data from the Bureau of Labor Statistics. Despite a 50-basis-point month-over-month improvement, the rate trailed the U.S. (3.8 percent), the state (4.1 percent) and all other major Texas metros. Still, the job market expanded 3.5 percent, or 94,700 jobs, in the 12 months ending in August, outperforming the U.S. by a solid 100 basis points. During the period, two sectors contracted for a combined 6,400 positions: mining, logging and construction and other services. Growth was led by trade, transportation and utilities (26,300 jobs) and education and health services (23,300 jobs).
Development activity remained steady, with 37,067 units under construction, but deliveries softened to 10,730 units through October. Amid high interest rates, investment activity dwindled to $1.5 billion in multifamily assets during the first 10 months of the year. The price per unit decreased by a considerable 28.6 percent year-over-year through October, to $109,988.
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