reaching new heights

Houston apartment construction surges to 6th highest in the nation

Apartment construction is soaring sky high in Houston.

cdngeneral.rentcafe.com

Apartment construction has been skyrocketing in Houston, and according to a new insight report from RentCafe, the metro area has the sixth highest new apartment construction rate nationwide in 2024.

The report from August 7 analyzed new apartment construction data across 369 U.S. metropolitan statistical areas (MSAs). For the purpose of the study, only apartment buildings containing 50 or more units were included. Any U.S. metros with fewer than 300 units or fewer than two properties/buildings were excluded.

The top five metros with the highest rates of newly built apartments expected in 2024 are New York City, New York (No. 1); Dallas, Texas (No. 2); Austin, Texas (No. 3); Phoenix, Arizona (No. 4); and Atlanta, Georgia (No. 5). Dallas-Fort Worth developers are expected to build a staggering 32,932 total apartment units in 2024, which is just three fewer units than No. 1-ranking New York City's anticipated goal.

The Houston metro area is still expected to complete 18,301 new apartments by the end of the year, so construction appears to be keeping up alongside the top five metros. In just Houston proper, developers are anticipating 8,159 completed units by year-end.

Houston also landed in the No. 3 spot for the highest apartment construction rate between 2020 and 2022, with 53,741 new apartment units opening around the metro since the beginning of the so-called "pandemic building boom."

The report attributes booming construction rates to each metro's steady population growth, the area's thriving job market, and its desirability among major employers.

"Demand for rental apartments in the U.S. continues to outstrip supply, even with recent construction efforts mirroring the building boom of the early 1970s — when a comparable number of rentals entered the market as Baby Boomers were coming of age — due to significant growth in the renter population in the last 50 years," the report's author wrote.

Houston makes up the bulk of new apartments in the area, while Spring is expected to build the second highest number of new apartments in the metro, totaling 2,236 units. Other suburbs like Katy and Richmond will complete an anticipated 1,464 and 907 apartments by the end of the year, respectively.

Here's how many new apartments other Houston-area cities expect to build by the end of 2024:

Conroe – 830 units
Fulshear – 660 units
Montgomery – 626 units
Cypress – 587 units
Humble – 470 units

Houston apartment construction by 2028
Based on the number of newly built apartments from 2019 to 2023, RentCafe's analysts extrapolated that New York, Dallas-Fort Worth, and Austin will continue dominating new apartment construction through 2028. But unlike past years when there was a steady growth in completed units, the report predicts construction will dwindle until 2027; then it will experience a big hike in 2028.

"[A]partment construction starts are expected to keep falling throughout the next year as developers struggle to get financing due to stricter loan standards amid economic uncertainties, which causes delays in projects," the report said.

For context, Dallas-Fort Worth had the highest number of new apartments completed over the five-year period – 128,418 units – from 2019 to 2023, versus New York's 116,207 newly built units. Houston built 83,972 new units during the same time period, landing at No. 3 nationally.

RentCafe calculated New York will once again lead the nation with 150,327 new apartments built by the end of 2028, and DFW will trail behind with 108,178 completed units. The Metroplex's anticipated figures are 28 percent lower than New York's expected apartments.

Houston, however, will slow down construction with a projected 55,785 new apartments by 2028, and the metro will claim No. 9 nationwide.

"[S]everal large metros are set to slow the pace of new apartment construction by 2028, yet they remain some of the nation's heaviest builders," the report said. "Specifically, Houston will welcome 28,187 fewer new apartments compared to the five years leading up to 2024."

The full report and its methodology can be found on rentcafe.com.

apartments housing job market population growth real estate reports austin leander autolink turnoff

Hottest Headlines of 2024

Drake's big buy leads Houston's top 10 real estate stories of 2024

The ranch is situated on 313 acres of land.

Photo by James Pharaon / Compass

undefined

Editor's note: The top real estate stories of 2024 reaffirmed what Houstonians already know — this city is a fantastic place to call home. Locals were captivated by news of rapper Drake settling nearby and by numerous rankings highlighting Houston-area neighborhoods as top places to live. Houston’s most well-known billionaire also made headlines with three major property acquisitions this year, including the prestigious River Oaks District. Meanwhile, stunning mansions continued to draw attention, along with plenty of oohs and aahs from readers.

1. Drake finally confirmed as new owner of $15 million Dos Brisas ranch near Brenham. Rumors that the rap icon had acquired the sprawling 313-acre ranch just 45 minutes outside of Houston sparked excitement, reaffirming Texas' status as a celebrity hotspot. Houstonians couldn't help but imagine scoring an invite to the former resort, now transformed into the private retreat of the Canadian musician and actor.

2. 2 Houston-area ZIP codes top 2023 list of hottest housing markets in U.S. The Opendoor report highlighted Cypress (77433) and Katy (77493) as the top two ZIP codes in the nation for homebuyers in 2023. Key factors driving interest included turnkey homes, competitive housing prices, and convenient locations, underscoring the appeal of these Houston-area communities.

3. Kingly Houston community is the No. 2 friendliest American neighborhood. Kingwood made a name for itself as the No. 2 friendliest American neighborhood. All Star Home, a home improvement services website, found that 18.75 percent of reviews for Kingwood-based businesses were described as "friendly."

4. Travel + Leisure ranks tight-knit Houston suburb No. 2 in America. Houston suburbs continued to gain national attention, with Travel + Leisure declaring Cinco Ranch the second-best suburb to live in America. The report analyzed realtor feedback and data to decide the best suburbs based on "affordable housing, top-rated schools, and excellent job opportunities."

5. Houston billionaire Tilman Fertitta buys River Oaks development for a reported $450 million. Fertitta expanded his real estate empire with the purchase of River Oaks District, a nearly 14-acre property located on Westheimer just east of 610 that's home to high-end retail and top restaurants such as MAD, Steak 48, and Loch Bar.

6. 6 Houston neighbors shine on new list of best small cities in America. WalletHub’s “The Best Small Cities in America” report included recognizable names to Houstonians: Friendswood, Rosenberg, Conroe, Missouri City, Spring, and Galveston. The report compared more than 1,300 U.S. cities with populations between 25,000 and 100,000 residents.

7. This $4.85 million Hill Country ranch with its own lazy river is going wild on social media. Listed for $4.85 million and featured on the popular Zillow Gone Wild social media account, commenters all across the country dreamt of owning this Boerne ranch largely due to its elaborate lazy river.

8. Houston billionaire Tilman Fertitta buys more than 5 acres of Galleria-area properties. Fertitta continued his shopping spree with the purchase of two properties, a 9-story office building and a 3.4-acre vacant lot that are adjacent to The Post Oak, his award-winning hotel.

9. River Oaks mansion by famed architect hits market for $18.9 million. This gorgeous 1938 home was designed by Houston architect John F. Staub, the man behind properties such as the River Oaks Country Club, Bayou Bend, and Rice University's Fondren Library. The home, listed for $18.9 million, sits on 1.6 acres and features modern amenities with historic charm.

10. Washington Ho lists Bellaire's 'Luke Skywalker house' for $5.5 million. The reality TV star-turned-real estate agent named the Bellaire property after the Jedi as a counterpoint to the West U “Darth Vader house.” Located at 4616 Oleander and listed for just over $5.5 million, Ho showed off his realtor skills by selling the home in October.

hot-headlines homes-for-sale celebrities