Houston’s Multifamily Growth Engine: An Investor’s Perspective
Where is demand concentrated in the metro and why? Fogelman Properties' Thomas Henry weighs in.
Houston’s multifamily market has been experiencing significant growth in recent years, driven by strong job creation, steady population inflows and a more affordable cost of living compared to similar metros.
The robust demand for rental housing has boosted multifamily development, particularly in suburban areas. In 2024 alone, nearly 21,300 units were added to the metro’s inventory, with H-Town being one of the top 10 markets for multifamily deliveries last year, according to Yardi Matrix research.
As of today, another 30,000 units were underway, with Houston remaining one of the most resilient and promising multifamily markets in the country, despite the shifting macroeconomic conditions. Thomas Henry, vice president of multifamily investments at Fogelman Properties—a constant investor in Houston assets—believes Houston is set for steady growth in 2025 and the coming years. His company has been active in the multifamily space for more than six decades, specializing in property management and investment. Today, Fogelman has a portfolio of more than 100 communities across 13 states, so we asked Henry to expand on trends he sees in one of the nation’s most dynamic metros.
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Recently, Houston has seen a surge in multifamily development. How is demand keeping up with new supply?
Henry: Compared to other MSAs with strong job and population growth, Houston’s supply pipeline is relatively manageable as a percentage of existing multifamily housing stock. The market’s multifamily demand remains strong despite the surge in new development, in part due to steady job growth, corporate relocations and an affordable cost of living compared to other major metros. Certain submarkets have been tested more than others but population growth and continued in-migration are helping to balance the new supply.
According to Yardi Matrix data, 83 percent of deliveries last year were in West Houston, the same area where most of last year’s transactions closed. What’s luring investors to this part of the city?
Henry: Many investors are drawn to West Houston over other parts of the city for the abundance of residential housing, robust white-collar employment and highly rated schools. The area tends to benefit from a diverse employment base, strong household incomes and consistent population growth. The combination of newer infrastructure, quality schools and a suburban feel with urban conveniences makes it a draw for renters, giving investors confidence in the long-term demand.
Do you see shifts in renter demographics or preferences across the metro?
Henry: Yes, it seems that more renters are opting for suburban multifamily communities, prioritizing larger floorplans, better amenities and access to highly rated schools. Affordability concerns are also driving more renters to seek value-driven options outside of the urban core while still wanting modern features and convenience.
What Houston submarkets are you expanding into?
Henry: We recently purchased a property in Humble, Texas. It’s a well-established area with compelling schools and excellent connectivity to other parts of the city which supports renter demand and helps appeal to a broader renter base.
Going forward, we are looking to expand to submarkets where we see solid job growth, population inflows and a healthy supply-demand balance. Our approach is flexible, but we’re prioritizing locations with strong fundamentals and room for growth.
What makes the suburban multifamily market particularly attractive for investment?
Henry: This market is attractive because it aligns with shifting renter preferences—more space, modern amenities and proximity to employment centers. Investors are capitalizing on this trend, especially in areas where infrastructure improvements are driving continued growth.
Besides Humble, are there any other submarkets that you see as having the most growth potential? Which ones and why?
Henry: Katy and The Woodlands remain safe bets due to their established economic bases and high desirability. Cypress is seeing increased demand as more renters are looking for suburban affordability without giving up their quality of life. Northeast Houston and the Interstate 45 corridor are also gaining some traction as more employers expand into these areas.
Are rents in the suburbs rising or is the market stabilizing?
Henry: Houston’s suburbs are experiencing a mix of stabilization and selective rent growth. Although rent increases have certainly moderated compared to the peak growth periods a few years ago, well-located properties in high-demand areas are still seeing consistent gains. The metro’s suburban multifamily remains resilient and has continued demand supporting a strong rental environment.
How do current macroeconomic conditions influence your investment decisions in the metro?
Henry: Macroeconomic conditions influence our approach, but Houston’s strong job growth and steady in-migration help mitigate the challenges of higher interest rates. While we remain mindful of borrowing costs, we see opportunity in well-positioned properties across the MSA. Houston’s employment diversity and affordability make it one of the more resilient markets, even in an ever-changing landscape.
What are your expectations for the Houston multifamily market in 2025 and beyond?
Henry: Demand fundamentals remain solid, especially in well-located suburban areas. Investors who remain disciplined and focus on high-quality assets in robust submarkets will likely see long-term appreciation as Houston’s economy continues to expand.
