Houston was ranked 14th out of 80 cities on the overall real estate prospects list, a portion of the “Emerging Trends in Real Estate 2023” report for the United States and Canada.
In this section, you will learn about the top factors making the Houston housing market one of the strongest today, including affordability, cash flow, and equity growth potential. In the tabs you’ll find more information about Houston’s population, employment trends and more.
Houston Housing Market Trends
In this section, we’ll discuss the median home value and rents in 2023 and over the last seven years. These trends are important for real estate investors to understand affordability and equity growth opportunities in Houston.
Home prices in Houston are below the national average.
The data in this chart is based on the average single family home in Houston and the United States as of December 2022.
In 2022, the median home value in Houston was $299,400. This is 12.79% more affordable than the average US home value.
The Houston housing market is somewhat competitive according to Redfin, scoring 59 out of 100.
Houston rents are also affordable compared to the national average
The median monthly rent for rental properties in Houston was $1,573 in 2022, which is 20% lower than the average US monthly rent of $1,973.
This means that renting is more cost-effective than buying in Houston. 57% of households in Houston are renter-occupied.
Houston has been appreciating at a steady rate
Houston is a prime choice for investors seeking a stable market with both cash flow and equity growth potential.
The average home price in the Houston metro area has risen by 74.05% over the past eight years, from $141,750 in 2014 to $253,566 in 2022. This increase represents a stable rate of appreciation, about 12% lower than the national average.
The average price of a Houston home has grown by 8.24% a year for the last eight years. Between October 2021 and October 2022, home values increased 16% year over year, from $257,929 to $299,400.
Houston rents have also been rising rising.
Houston has experienced rent appreciation that is much slower than the general US market. In the 8-year period from 2014 to 2022, rents grew by 19.5%, which is 52.8% slower than average rent growth in the US. During this period, rents grew at an average rate of 2.58% per year. But as home prices keep rising, rents in Houston are also rising. According to data from rental platform Zumper, rents in the Greater Houston area increased 9.9% from February 2021 to February 2022.
Houston Population Trends
One of the most promising signs of a strong real estate market is population growth. In this section, we’ll discuss what’s happening in the Houston metro in that area.
Houston's population has been growing rapidly.
The Houston-Sugar Land-Baytown Metropolitan Statistical Area had a population of 7,206,841 as of the 2021 census. Between 2010 and 2021, Houston’s population grew by 21.18%, adding 1 million residents over the past decade. This accounted for a quarter of Texas’ total population growth during that period.
During this period, Houston’s population increased by 1.94% annually, making it the fifth fastest growing metropolitan area in the United States. Houston’s 11-year population growth rate is 190.5% higher than the national average.
Houston Employment Trends
Another sign of a good place to invest in real estate is a strong economy. In this section, we’ll discuss what’s happening in with jobs in Houston.
Houston has been experiencing significant job growth.
Houston has become a hotbed for job seekers and employers alike. This is due in part to the city’s diverse economy, which has allowed it to weather the storm of the pandemic better than other cities.
From July 2021 to July 2022, Houston added 193,600 new jobs—a 6.26% increase in jobs. This is 63% more than the national average.
Nearly every Houston industry outside of oil and gas and the information sector has surpassed pre-pandemic employment levels. The job search website Indeed ranked Houston as one of the best cities for recent graduates.
But despite the high job growth rate, Houston’s unemployment rate is still above average: In September 2022, the metro area had an unemployment rate of 4.2 compared to the national average of 3.5 for that month.
The Houston metro area has 24 companies on the ’22 Fortune 500 list, ranking it third for number of Fortune 500 companies behind New York (64) and Chicago (35) but ahead of Dallas-Fort Worth (23).
Some of the top employers in Houston are Walmart, Memorial Hermann Health Systems, The University of Texas MD Anderson Cancer Center, HEB, United Airlines and Schlumberger.
Major employers in Houston
Why Invest in the Houston Housing Market Today
In this section, we’ll recap what we’ve covered above in terms of Houston’s housing market trends, population trends and employment trends to help you understand what makes Houston a strong place to invest in 2023.
Good cash flow potential
The Houston metro area offers great opportunities for investors who are looking for a stable and landlord-friendly market.
The rental market in Houston is strong because of the city’s high percentage of renters. In fact, 57% of households in the Houston metropolitan area are occupied by renters.
In other words, if you invest in the right Houston neighborhoods, you will enjoy a high return on investment.
Fast job growth and strong economy
Houston is a city that’s traded on its low cost of living and fast job growth for decades. It’s a place where people come to find their fortune, and where companies come to find their employees.
In recent years, Houston has been bolstered by three major trends: healthcare, renewable energy and technology. A growing educated workforce and attractive cost-of-living are also drawing new residents to the area.
Houston added 193,600 new jobs between July 2021 and July 2022, a 6.26% increase in jobs. This is 63% higher than the national average.
The Houston region is second only to New York City in terms of manufacturing GDP in the United States. It has the world’s largest medical complex, the Texas Medical Center, which provides clinical health care, research, and education at its 58 institutions.
Modest real estate appreciation rates
Houston has a lot to offer in terms of affordability and stability. The market has experienced a steady appreciation rate over the past decade, which means that it is safe to invest in real estate here.
The value of properties in the Houston metro area rose by 74.05% over the course of 8 years, from 2014 to 2022. This represents a stable rate of appreciation of 8.24% annually.
Rapid population growth
The Houston area has grown by nearly 1.1 million residents since 2010.
Based on data from the Texas Demographic Center, it is estimated that the Houston region will add an average of two million residents per decade over the next 40 years.
The Houston metro area’s population growth rate of 21.18% over the last 11 years exceeds the national average by 190.5%.
High quality of life ratings
Houston is a city of diversity. The city of Houston itself is home to 145 languages and has a high quality of life index score of 166.42 with a very high purchasing power score (146.6) and a moderate cost of living score (69).
But what really makes Houston unique is its educational opportunities. Houston Independent School District serves 213 square miles with 288 schools, 13,000 educators, and over 210,000 students. It’s also home to many distinguished universities like Rice University, Texas Southern University and Texas A&M University—all within driving distance of downtown Houston!
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