With uncertainty about interest rates and inflation, more homebuyers are continuing to turn to Houston’s rental market. May saw a surge in demand for single-family rental homes as well as townhomes and condominiums for rent.
According to the Houston Association of Realtors’ (HAR) May 2023 Rental Market Update, single-family home rentals increased 17.4 percent year-over-year. The average rent was statistically flat at $2,255. A total of 3,987 leases were signed versus 3,395 in May 2022.
New listings of single-family rentals rose 14.8 percent in May, which means there is an adequate supply of homes to meet the increasing demand. Days on Market, or the actual time it took to lease a home, rose from 24 days to 34.
“Houston’s rental market continues to be hot, which means some would-be homebuyers are still wary of the sales market,” said HAR Chair Cathy Treviño with Side, Inc. “As inflation cools and housing prices continue to moderate, I believe we will see more renters shifting their focus towards homeownership.”
Consumers showed more interest in townhomes and condominiums for rent in May. Leases of those properties increased 20.7 percent on the year, with 736 units leased compared to 610 last May. The average lease price rose 2.5 percent to $2,000. New listings were up 23.5 percent, and Days on Market increased from 31 to 37 days.
Pre-pandemic Perspective: Compared to the last May before the pandemic, single-family home rentals are up 18.3 percent. In May 2019, leases were signed for 3,370 single-family homes. The average rent is currently 20.3 percent higher than it was back then – $1,874. Townhome/condominium rentals totaled 723 in May 2019. That is 1.8 percent behind the May 2023 volume. The average townhome/condo rent is currently 20.0 percent above its May 2019 price of $1,666.
HAR’s new Rental Market Update is distributed the third Wednesday of each month, one week after the release of the monthly Sales Market Update. An archive of all these reports is available in the HAR Online Newsroom.
