Houston’s Rising Rental Prices

Houston’s rental prices keep rising year over year with no slowdown in the near future.  I read an article the other day stating that the National Average of rental pricing rose an average over 4% per year – twice as much as normal inflation rate of 2% increase per year.   Yet Houston’s rent has risen above the National Average – and has risen 5% yearly over that same time.  That’s a staggering rate!  I will note a few statistics from local rental/apartment, housing and economic references to help us understand where this is going.

End of 2014, Houston 1-bedroom rent averaged $910 and a 2-bedroom averaged $1,040 – making Houston the 24th most Expensive Major Metro city in the US.  This is basically telling us that Houston is 9% more expensive than the National Average (apartment list M.Rosett).

There are a lot of reasons for this – most commonly referenced to the strength of Houston’s local economy.  Houston has great job growth in the oil & gas fields, medical, technology, transportation, manufacturing, housing and so much more.  As well as there is still plenty of room to grow Outward & Upward in Houston; though this is slowing down dramatically.  If you’ve lived here for anytime you can remember seeing farms on FM1960/Hwy6 that’s now lined with new subdivisions, apartments, shopping & dining.

Did you know Ed Emmett our local Harris County Judge is trying to figure out ways to fund this growth.  He said we cannot leave Harris County on an island anymore – it’s a part of Houston.  Which in turn leaves funding for police & fire, road maintenance, and other simple items are being underfunded for its growth and size.  Not that long ago places like Cypress, Spring, Katy and other areas in Harris County was just that, suburbs in an outlying county/jurisdiction. Today with the growth of Houston – people now group all of Harris Country with Houston; you’ll actually see it “Houston, Woodlands, blood

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pressure Sugarland,” this is how they group Houston now.

With all that talk of rising rental prices, Houston and the suburbs – even areas like Katy, Woodlands, Pearland, and Sugarland and so on; rental prices are steadily rising above the national norm as well.  So the thought of going out to the suburbs to get a cheaper rental/home prices is not the same as it has been historical.  Yes, it’s still more economical than downtown Houston, Galleria or others – but not by much, especially if you work in those areas and have to commute.

In my opinion this trend will continue to happen over the next several years.  While new homes are becoming more expensive as well – Houston’s new home market is still ranks as one of the Top Major Metro areas for affordability for new homes.  Though, I think the trend of rising prices for new homes will continue as well, considering the major factors of labor shortages (most people who got out of the industry in the recession never came back), lot/land shortages & materials costs has driven new home prices up as well.

The reality is – as the days grow longer and the months turn to years, everything rises in price/costs, especially when it comes to housing (rental or new homes).  Not many people say the wish they would have waited longer to buy a new home, rather they’d wish they bought sooner when prices were “x.”  We have to be thankful for a growing and strong economy such as Houston, but we have to understand that people and business are coming here at a rate of 60,000 to over 100,000 people a year on average. Which will continue to drive the demand for housing. Everyone will need a roof over their head – rental or ownership. Do your homework and speak with a realtor, builder or another professional to see what’s best for you now and in the near future.