Renting over buying a home has always been a more economical option for many Americans — but the gap is now gigantic, especially in Houston.
A multifamily report from Newmark analyzing the city's first-quarter performance found that the average rent was $1,273. That was a 0.3 percent dip from what was averaged in 2024.
But the absurd layer is how far that is away from the average monthly mortgage payment in the city, which is $3,496. That's more than 2.5 times the average cost of multifamily rents. And even if you opt for a Class A rental in Houston, your payment based on the average of $1,731 would still be half the amount of buying a typical home.
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"The affordability gap between Class A rents and the estimated PITI for new homebuyers is close to its widest point in recent history," Newmark further noted.
However, rents are expected to head back to a positive trajectory. In fact, Newmark forecasts that the Houston MSA will see 1.8 percent growth in all of 2025 versus the previous year. That number would tie the city for third with San Diego on the list among other major Sunbelt markets, falling behind just San Francisco and Los Angeles.
Moreover, Newmark projects that rent growth will accelerate to an average of 2.8 percent between 2026 and 2029. Newmark added that "every submarket in the Houston MSA is anticipated to experience over 1.0% rent growth from 2026 through 2029."
Also, there are some other key multifamily figures to note in the market report. For example, occupancy so far in 2025 is 88.7 percent, which is 70 basis points behind the 10-year average. But the amount is a 20 basis point improvement from 2024.
Most importantly, new supply is decreasing dramatically. Newmark expects that multifamily deliveries in Houston will total just 8,308 units. That would be down from 19,130 in 2024 and 25,545 in the preceding year. Then in 2026, the forecast calls for just 3,032 units, before shooting up to 11,340 a year later.
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Anthony Russo
Anthony Russo has been contributing to GlobeSt. since July 2024. Along with CRE, his financial background expands to capital markets, the economy, and consumer issues. Previously, he has written for CapitalWatch and was a senior reporter for The US Sun.
