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Data Show Signs of Multifamily Slowdown

HOUSTON—The nervous wait for an inflection point came much later than many expected, but still occurred on the heels of plummeting oil prices where job growth in Houston slowed dramatically in 2015 and is expected to remain limited in 2016.

By Lisa Brown | lisabrown | Updated on February 26, 2016

Jay Parsons Parsons says the leasing environment is challenging, which is expected to continue for the next 15 months.

HOUSTON—The Houston apartment market is experiencing a notable inflection point, showing significant signs of weakening under the weight of a suddenly sluggish economy and a surge of new apartments. Rent growth is slowing, vacant units are taking longer to backfill, fewer renters are renewing leases and income levels for new renters are falling, according to an MPF Research analysis of actual rent roll data from RealPage Inc.

While property surveys and Internet listings suggest the Houston apartment is holding up well in spite of the sluggish local economy, lease-transaction data pulled from rent rolls utilizing RealPage software paint a very different picture. Looking at rent roll data for November 2015 and January 2016, the number of lease applications dropped 3.5% compared to the same period a year earlier. During the same period, the number of lease renewals declined by 4.9%, which triggered a drop in resident retention rates. In turn, occupancy fell 0.7 points.

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