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Monthly multifamily market intelligence

The Pierson Report

Monthly multifamily market intelligence for local, state, national, and global context. Published by NVest Analytics. Every figure is sourced and dated.
October 2026
Houston MSA. Multifamily
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The Month in Three Parts

How We Got Here

  • Houston's 2026 supply wave was smaller than Austin's or DFW's, but Q2 vacancy still hit 11.1%, up 70 basis points year over year, with effective rent $1,312 down 2.3% [1].
  • National construction cooled to 475,000 units, 3.5% of inventory, while agency 5-year quotes moved from 5.14 to 5.29% in March toward 6.07% on Aug 31 [2][3].
  • The 10-year Treasury reached 5.24% on Oct 1, up from 4.78% on Sep 4, and the 30-year mortgage hit 7.28% in the week of Oct 1 [4][5].
  • The Fed lifted the target range to 3.75 to 4.00% on Sep 16 in a unanimous vote, after futures had priced a possible increase [6][7].
  • Texas job growth slowed to 1.6% year to date through July after 1.9% annualized in H1, below the 2% long-run average [8][9].

Where We Are Now

  • Conventional occupancy reached 89.1% in September, up 0.8 points year over year, while effective rent of $1,329 was down 1.2% [10].
  • Demand is ahead of supply: 8,377 units absorbed year to date through Q2 against 8,232 delivered, with Q2 absorption of 6,177 nearly triple Q1 [1].
  • The pipeline is emptying: 11,756 units under construction, down 20.8% from Q1 and 36.4% from a year ago [1].
  • Inflation remains above target: July CPI 3.4% with core 2.5%, and August PCE 3.4% with core 3.0% [11][12].
  • SOFR is 3.87% on Oct 1, the 30-year mortgage is 7.28% for the week of Oct 1, and agency 5-year debt was 6.07% on Aug 31 [13][5][3].
  • Pricing is still tight: average cap rate 5.6% versus 6.07% agency debt, about 47 basis points of negative leverage, while H1 sales totaled $362.2 million across 65 deals [14][3][1].

Where We're Headed

  • Futures price about an 86% chance the Fed holds on Oct 27 to 28 after the Sep 16 hike; a 5.24% 10-year Treasury keeps refinance math tight [15][6][4].
  • 2027 completions are forecast near 5,600 units, the lowest in nearly 15 years; with absorption above deliveries, vacancy should keep easing into 2027 [16][1].
  • Deal flow picked up: the 573-unit Resia Ten Oaks sale reported Oct 1, Park Row's 360-unit groundbreaking Sep 21, and Artis Montrose's 330-unit top-out Sep 3 [17][18][19].
  • The Dallas Fed cut 2026 Texas job growth to 1.7% on Aug 21; Brent $96.02 and WTI $91.48 on Sep 1 support Houston energy payrolls [8][20].
  • Expect occupancy gains to reach rents by early 2027, while debt priced above cap rates keeps Houston cap rates near current levels [10][16][3].

What It Means for Houston

  1. Refinance math has tightened. The Fed raised to 3.75 to 4.00% on Sep 16 and the 10-year Treasury hit 5.24% on Oct 1; Houston owners with 2026 or 2027 maturities should model agency debt near 6.07% from Aug 31, not cuts [6][4][3].
  2. Houston fundamentals are improving. Conventional occupancy reached 89.1% in September, up 0.8 points year over year, while effective rent of $1,329 was down 1.2%; absorption of 8,377 units passed 8,232 delivered through Q2 [10][1].
  3. Supply is the tailwind. Under construction fell to 11,756 units, down 36.4% from a year ago, and 2027 completions are forecast near 5,600, the lowest in nearly 15 years, so vacancy should keep easing if demand holds [1][16].
  4. Quality deals are clearing. First-half volume reached $362.2 million across 65 transactions at about $230,800 per unit, and late-September activity included the 573-unit Resia Ten Oaks sale plus Park Row and Artis Montrose milestones [1][17][18][19].
  5. Texas growth still matters. Texas job growth slowed to 1.6% year to date through July and the Dallas Fed cut 2026 to 1.7%, but Houston gets support from energy payrolls and a metro population up 1.6% to 7.90 million [8][20][21].
  6. National rates set Houston's floor. The Sep 16 hike, SOFR at 3.87% on Oct 1 and a 7.28% 30-year mortgage keep U.S. borrowing costs high; for Houston, that favors holding leverage low and letting occupancy gains reach rents [6][13][5][10].
  7. Global yields reach Houston too. The U.S. 10-year was 5.24% on Oct 1 while the UK gilt was 4.92% Sep 30, Germany 3.60% and Japan 3.09% Oct 1; higher global yields can keep Houston debt costs elevated [4][22][23][24].

Houston Multifamily

Houston's apartment market is tightening. Conventional occupancy reached 89.1% in September, up 0.8 points from a year ago, while effective rent of $1,329 was down 1.2% [10]. Second-quarter absorption of 8,377 units passed the 8,232 delivered, and the construction pipeline shrank 36.4% from a year ago to 11,756 units [1]. Rent growth should follow as supply thins: about 5,600 units are forecast to deliver in 2027, the lowest in nearly 15 years [16].

Average cap rate
5.6%
Class B suburbs 6.0 to 6.25%
Apartment Loan Store, Sep 4 [14]
Rent growth
-1.2%
Effective rent, September 2026
ALN, Sep 30 [10]
Occupancy (conventional)
89.1%
September 2026; includes lease-ups
ALN, Sep 30 [10]
Population growth
+1.6%
2025 metro estimate; 7.90M residents
Census, Vintage 2025 [21]

Houston Cap Rate Range by Asset Class

Estimated class bands set around the 5.6% average (Apartment Loan Store, Sep 4); no class-level cap rates were published.
Range chart of Houston estimated cap rates by class4%5%6%7%Class A4.9 to 5.3%Class B5.4 to 6.0%Class C6.1 to 7.0%avg 5.6%debt 6.07%
Estimated cap rate rangeMarket averageAgency loan rate
Sources: Apartment Loan Store, Sep 4 [14] [3]

Houston vs. National Fundamentals

Houston rents fell 2.3% in Q2 [1] while U.S. asking rents rose 1.5% [2]; vacancy spans 7.1 to 11.1% by methodology [16].
Rent growth, year over year0%-2%-4%+2%Houston-1.2%U.S.+1.5%Vacancy0%5%10%15%Houston10.9%U.S.8.9%
HoustonUnited States
Sources: ALN, Sep 30; Cushman and Wakefield, Aug 4; Northmarq, Aug 19 [1] [16] [2] [10]

Supply Pipeline, U.S. and Houston

The delivery wave is ending. Under construction is down 36.4% from a year ago [1], and 2027 completions are forecast near a 15-year low [16].
MetricNationalHoustonRead-through
Deliveries88K in Q2, down 27% from a year ago [2]8,232 units year to date through Q2 [1]2027 forecast about 5,600 units, lowest in nearly 15 years [16]
Under construction475,000 units, 3.5% of inventory [2]11,756 units, down 20.8% from Q1 and 36.4% from a year ago [1]Permitting remains light [16]
Absorption vs. deliveries362K absorbed vs 358K delivered, four quarters [2]8,377 absorbed vs. 8,232 delivered year to date; Q2 alone 6,177 [1]Q2 absorption nearly tripled Q1's 2,200 units [1]
2026 vacancy forecastPeaked, now tightening [2]Falling; down 40 bp in Q2 to 7.1% [16]Largest quarterly improvement in nearly five years [16]
Supply pressure by submarketLowest vacancy: Sugar Land/Missouri City 6.4%, Pearland 6.5%, Northeast 6.6% [1]Northwest Houston is 16% of regional sales; Southeast also active [16]
Rent trend by submarket, year over yearEast End +2.8%; South Central +2.6%; Northeast +1.9%; metro -2.3% [1]Inner-loop and east side leading; Class B and C flat [16]

Houston Submarket Snapshot

The largest cities in the Houston-The Woodlands-Sugar Land, TX metro. Rent and rent growth from Apartment List (Sep 2026); multifamily units permitted (buildings of 5+ units) from the Census Building Permits Survey. Permits lead construction by 12 to 24 months. Rows alphabetical; hover a row for detail.
SubmarketMedian rent
Apartment List, Sep 2026 [25]
Rent, year over year
Apartment List [26]
MF units permitted, 2025
Census BPS [27]
MF units permitted, 2026 through Aug
Census BPS [28]
2026 permit pace vs. 2025
annualized
Baytown$1,275-6.7%00n/a, no 2025 permits
Conroe$1,245-2.9%60-100%
Houston$1,269-2.3%4,9882,541-24%
La Porte$1,337-4.3%00n/a, no 2025 permits
Pasadena$1,266-1.0%00n/a, no 2025 permits
Pearland$1,559+0.6%00n/a, no 2025 permits
Texas City$1,256-1.2%00n/a, no 2025 permits
Webster$1,329-0.4%00n/a, no 2025 permits

Houston Transactions and Deal Flow

Houston's deal flow picked up at the end of September. The largest trade was Resia Ten Oaks, a 573-unit, 2024-vintage community in West Houston bought by a partnership of Spirit Investment Partners and Strategic Value Partners [17]. Developers stayed active: OHT Partners broke ground on the 360-unit Park Row in the Energy Corridor [18], and Southeastern topped out the 330-unit Artis Montrose [19]. First-half volume reached $362.2 million across 65 transactions at about $230,800 per unit [1].

PropertySubmarketUnitsBuyer / SellerPrice / CapReported
Resia Ten Oaks [17]West Houston [17]573 [17]Spirit Investment Partners and Strategic Value Partners partnership; 2024 build [17]UndisclosedOct 1 [17]
Park Row [18]Energy Corridor [18]360 [18]OHT Partners; broke ground on a 14-acre site at 14192 Park Row Blvd. [18]DevelopmentSep 21 [18]
Artis Montrose [19]Montrose [19]330 [19]Southeastern; topped out, a conversion of the former Disco Kroger site [19]DevelopmentSep 3 [19]
Sources: REBusinessOnline, Oct 1 [17] [18] [19] [1]

Multifamily Capital Markets

Financing costs moved up into October: the 30-year home mortgage rate hit 7.28% in the week of Oct 1, up 57 basis points from 6.71% on Sep 3, and the 10-year Treasury yield reached 5.24% on Oct 1 [5][29][4]. Agency lending remains the workhorse for apartment deals, with a combined $176 billion purchase cap for 2026 and half of volume required to be mission-driven [30]. SOFR stood at 3.87% on Oct 1, keeping floating-rate bridge money near 6 to 8% [13].

Agency Multifamily Rates, 2026 Trend

Indicative 5-year agency fixed rate at each dated quote. Hover the points.
6.4%6.0%5.6%5.2%4.8%Jan 20Mar 9Aug 315.42%5.29%6.07%
Sources: BWE, Aug 31 [3]

Lending Landscape

Programs, caps, and terms relevant to multifamily owners.
ItemCurrentSource
Agency 2026 purchase cap$88B each, $176B totalFHFA, Nov 24 [30]
Mission-driven minimum50%FHFA, Nov 24 [30]
Freddie Mac 5-year fixed, higher leverage (1.25x / 65%)5.92-6.07%BWE, Aug 31 [3]
Fannie Mae 5 / 7 / 10-year, 65% LTV, 1.35x5.56-5.96% / 5.62-6.02% / 5.68-6.08%BWE, Aug 31 [3]
Freddie Mac 5 / 7 / 10-year, 60% LTV, 1.30x5.87-6.02% / 5.92-6.07% / 5.88-6.03%BWE, Aug 31 [3]
Max LTV / min DSCRAgency tiers run to 80% LTV at 1.25x; best pricing at 55 to 65% LTV and 1.35 to 1.55x. Loans actually closing averaged 63.3% LTV and 1.43x in Q2BWE, Aug 31; CBRE, Q2 2026 [3]
Bridge floating, bank / balance sheetSOFR + 225 to 325 bp (about 6.1 to 7.1% with SOFR at 3.87% on Oct 1)Crittenden; New York Fed, Oct 1 [31] [13]
Bridge floating, debt fundSOFR + 300 to 450 bp (about 6.9 to 8.4% with SOFR at 3.87% on Oct 1)RRA Capital; New York Fed, Oct 1 [32] [13]
Multifamily rate range (all products)5.43% to 6.63%Northmarq, Aug 25 [33]
30-year home mortgage (context)7.28%Freddie Mac PMMS, week of Oct 1 [5]

Texas

Texas gave back some of its second-quarter momentum. Employment grew 1.9% annualized in the first half [9], but payrolls fell 0.1% annualized in July, pulling year-to-date growth to 1.6%, below the state's 2% long-run average [8]. The Dallas Fed cut its 2026 forecast to 1.7% on Aug 21, from 2.0% in July [8]. Manufacturing wage pressure eased in August, then the Dallas Fed wages index rebounded to 27.4 in September from 21.1 [34] [35].

Texas job growth, H1 2026
1.9% annualized
Year to date through Jul: 1.6%
Dallas Fed, Jul 31 [9] [8]
2026 employment forecast
1.7%
Cut Aug 21 from 2.0%. Range 1.3 to 2.1%
Dallas Fed, Aug 21 [8]
Manufacturing wage index
27.4
Sep reading, up from 21.1 in Aug
Dallas Fed, Sep 28 [35] [34]
Labor supply
Tightening
Unemployment 4.5%; average hourly earnings $35.82
Dallas Fed, Aug 21 and Sep 10 [8] [36]

Texas Job Growth vs. Long-Run Average

Annualized job growth versus the state's 2% long-run average. Hover bars.
0%1%2%Long-run avg2%H1 20261.9%2026 YTD1.6%2026 fcst1.7%
Sources: Dallas Fed, Jul 31 and Aug 21 [8] [9]

State-Level Operating Factors

Costs and policy that hit Houston net operating income directly.
FactorStatusRead-through
Property insuranceTexas FAIR Plan residential rate changes took effect Sep 1; the plan does not cover commercial multifamily properties [37]First renewals at new rates land this quarter; apartment policies price separately
Property tax2026 apartment appraisals: Harris County +7.9% to $65.6B, the largest commercial category [38]Milder than Dallas (+19.6%) and Tarrant (+23.8%) [38]
Population and migrationMetro added about 127K residents in the year to Jul 1 2025, reaching 7.9M, up 1.6% [21]Core demand driver for apartment absorption
Energy sectorBrent $96.02 and WTI $91.48 on Sep 1; Strait of Hormuz flows 4.9 million barrels a day in Q2 versus 21.6 million before the conflict [20]Supports Houston and Permian energy jobs
Peer metros (Q2 2026)DFW stabilized vacancy 9.6%, effective rent $1,470 with its first quarterly gain in over a year [39]. Houston stabilized vacancy 11.1%, rent $1,312, down 2.3% YoY [1]Texas metros are stabilizing as supply pipelines shrink

National Rates and the Fed

The Fed raised its target range a quarter point to 3.75 to 4.00% on Sep 16 in a unanimous vote, the first hike since July 2023 [6]. The 10-year Treasury reached 5.24% on Oct 1, up from 4.78% on Sep 4 [4], and the 30-year mortgage hit 7.28% in the week of Oct 1 [5]. August PCE inflation ran 3.4% headline and 3.0% core [12]. After a weak September jobs report, futures price about an 86% chance the Fed holds at its Oct 27 to 28 meeting [15].

10-Year Treasury
5.24%
Oct 1. Up from 4.78% on Sep 4
U.S. Treasury, Oct 1 [4]
Fed Funds Target
3.75 to 4.00%
Raised Sep 16 in a unanimous 12-0 vote
Federal Reserve, Sep 16 [6] [7]
SOFR
3.87%
Oct 1. Up from 3.66% on Sep 3
New York Fed, Oct 1 [13]
Next Fed Meeting
Oct 27 to 28
Futures price about an 86% chance of a hold
CME FedWatch via CNBC, Oct 1 [15]
CPI / PCE
3.4% / 3.4%
Jul CPI 3.4% (core 2.5%). Aug PCE 3.4% (core 3.0%)
BLS, Aug 12; BEA, Sep 30 [11] [12]

The Rate Stack: How a Houston Loan Gets Priced

Stacked from the Fed's policy rate up to what a borrower actually pays. Hover each layer.
Fed Funds midpoint 3.875%+1.37%+0.83% spread10-year Treasury 5.24%Agency 5-year 6.07%0%
Policy rate (Treasury)Term premium (Treasury)Lender spreadAll-in loan rate
Sources: Federal Reserve, Sep 16; U.S. Treasury, Oct 1 [7] [4] [3] [6]

10-Year Treasury vs. 30-Year Mortgage Rate, 1980 to today

The mortgage rate sets the cost of buying a house; the gap over the Treasury is what the market has added since 2022.
10-Year Treasury
5.24%
Daily close, Oct 1
U.S. Treasury, Oct 1 [4]
30-Year Mortgage
7.28%
Freddie Mac PMMS, week of Oct 1
Freddie Mac, Oct 1 [5]
Spread, latest month
2.04 pts
1980 to date average 1.84 pts
Freddie Mac, Oct 1; FRED, Sep 4 [5] [4] [41]
0%4%8%12%16%024198019841988199219962000200420082012201620202024Spread, percentage points
30-year fixed mortgage (Freddie Mac)10-year TreasurySpread
Sources: U.S. Treasury and Freddie Mac, monthly averages through Oct 1, 2026; FRED for the 10-year before 2026 [4] [5] [40]

Global Backdrop

Global bond yields moved higher again as central banks kept tightening. The U.S. 10-year Treasury yield was 5.24% on Oct 1 [4], with the UK gilt at 4.92% on Sep 30 [22], Germany at 3.60% [23] and Japan at 3.09% on Oct 1 [24]. The Federal Reserve raised its target range to 3.75% to 4.00% on Sep 16 [42], and the ECB deposit rate reached 2.50% on Oct 2 [43]. Higher global yields feed directly into U.S. borrowing costs.

10-Year Government Bond Yields

Where the U.S. sits vs. peers. Hover a bar for context.
0%2%4%6%United States5.24%United Kingdom4.92%Germany3.60%Japan3.09%
Sources: U.S. Treasury, Oct 1; Bank of England, Sep 30; Deutsche Bundesbank, Oct 1; Japan Ministry of Finance, Oct 1 [4] [22] [23] [24]

Global Policy and Risk Snapshot

Central-bank posture and macro risks that feed into borrowing costs.
FactorStatusWhy Houston cares
European Central BankDeposit facility 2.50% on Oct 2, raised from 2.25% effective Sep 16 [43] [44]The second ECB increase of this cycle; keeps global yields anchored higher
Bank of EnglandBank Rate 3.75% on Oct 1 [22]Gilt yields at 4.92% on Sep 30, an inflation worry [22]
Bank of JapanPolicy rate 1.00%, held Jul 31 [45]. JGB 10-year 3.09% on Oct 1 [24]Less Japanese demand for Treasuries, so higher U.S. yields
Oil and energyElevated Brent $96.02, WTI $91.48 on Sep 1; Hormuz flows 4.9 million barrels a day in Q2 [20]Plus for Texas jobs and royalties; minus for inflation and Fed posture
U.S. dollarIndex 99.16 on Sep 4, down 0.5% over the month and up 1.4% year to date [46]A weaker dollar makes U.S. property cheaper for foreign buyers

Sources

Show the 46 sources cited in this edition
  1. Cushman & Wakefield: MarketBeat Houston Multifamily Q2 2026
  2. Cushman & Wakefield: U.S. Multifamily MarketBeat
  3. BWE: Market Rates, as of Aug 31, 2026
  4. U.S. Treasury: Daily Treasury Par Yield Curve Rates, 10-year
  5. Freddie Mac: Primary Mortgage Market Survey history
  6. Federal Reserve: Monetarypolicy
  7. New York Fed: Effective Federal Funds Rate data, with target range
  8. Dallas Fed: Dallas Fed: Texas employment forecast softens
  9. Dallas Fed: Texas Economic Indicators
  10. ALN Apartment Data: Monthly Market Review, conventional properties, Houston, September 2026
  11. BLS: Consumer Price Index, July 2026
  12. BEA: Personal Income and Outlays, August 2026
  13. New York Fed: Secured Overnight Financing Rate (SOFR) data
  14. Apartment Loan Store: Cap Rates in Houston, Texas
  15. CNBC: Stock market today live updates
  16. Northmarq: Houston Multifamily Market Insights
  17. REBusiness: Partnership Acquires 573-Unit Apartment Community in West Houston
  18. REBusiness: OHT Partners Breaks Ground on 360-Unit Multifamily Project in West Houston
  19. REBusiness: Southeastern Tops Out 330-Unit Multifamily Redevelopment Project in Houston
  20. U.S. Energy Information Administration: Brent and WTI spot prices (Brent $96.02, WTI $91.48 on Sep 1, 2026)
  21. Census: Metropolitan statistical area population estimates, Vintage 2025
  22. Bank of England: Database series IUDBEDR, Bank Rate
  23. Bundesbank: Daily yield of the current 10-year Federal bond
  24. Japan Ministry of Finance: Japanese Government Bonds interest rate, 10-year
  25. Apartment List: Apartment List rent estimates, Sep 2026
  26. Apartment List: Apartment List rent growth year over year, Sep 2026
  27. Census: Building Permits Survey, places, 2025 annual
  28. Census: Building Permits Survey, places, year to date through Aug 2026
  29. Freddie Mac: Primary Mortgage Market Survey history
  30. FHFA: U.S. Federal Housing Announces 2026 Multifamily Loan Purchase Caps for Fannie Mae and Freddie Mac
  31. The Crittenden Report: Bridge lenders are flocking to multifamily
  32. RRA Capital: The bridge lending market floodgates will open in 2026
  33. Northmarq: Commercial mortgage rates and spreads, as of Aug 25, 2026
  34. Dallas Fed: Texas Manufacturing Outlook Survey
  35. Dallas Fed: Texas Manufacturing Outlook Survey
  36. Dallas Fed: Texas Economic Indicators
  37. Texas FAIR Plan: Texas FAIR Plan Association TFPA Approved Rate Changes and Annual Adjustment Updates
  38. Houston Chronicle: New 19-story student housing tower near Texas A&M
  39. Cushman & Wakefield: MarketBeat Dallas/Fort Worth Multifamily Q2 2026
  40. FRED: DGS10, Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
  41. FRED (Federal Reserve Bank of St. Louis): DGS10, Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
  42. Federal Reserve: FOMC statement, Sep 16, 2026
  43. ECB: Key ECB interest rates, deposit facility
  44. ECB: Official interest rates
  45. Bank of Japan: Mpmdeci
  46. Trading Economics: U.S. Dollar Index (DXY), 99.16 on Sep 4, 2026
Disclosures. Compiled Oct 2, 2026 from publicly available sources; figures are as reported by each source on the date shown and have not been independently verified. Where sources conflict, the range is shown. Not investment advice.
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