BY WESLEY GARDNER CONTRIBUTIONS BY JOVANNA AGUILAR, CASSANDRA JENKINS, EMILY LINCKE & DANICA LLOYD
Managing the impact
What to expect
Monthly rent vs. monthly mortgage rates as of May 2024
John McMahon—vice president of High Street Residential, developer of The Residences at King- wood West, which opened in March—said the Lake Houston area is an attractive area for developers. “The residents represent a wide array of people that work in all different types of industries across Houston, whether that’s people near the Port of Houston, people downtown in professional services, people that go west for oil and gas jobs,” he said. Additionally, McMahon noted the influx of available apartment units in the area has led to more competitive price points for renters. “We’ve seen a lot of supply in that area,” he said. “If anything, the competition has just made the prices between all the communities competitive.” McMahon said The Residences at Kingwood West also offers four weeks free on all new leases as an added incentive for prospective tenants. The Houston Association of Realtors reported only 40% of Greater Houston-area households could afford a median-priced single-family home in the
Because interest rates have roughly doubled since early 2022, the cost of financing new apartment projects is much less sustainable for developers today, McClenny said. “[Higher interest rates] causes a lot of problems for a lot of companies to have to ante up more capital to cover that,” he said. For projects to reach completion recently, developers and investors must have been planning the projects and purchasing land at least two to three years ago, Spillette said. However, rising interest rates have caused the market to slow. “We are having a pause because of what’s happened to interest rates, and developers have [had] … a lot more difficulty getting financing in the last year to start new projects,” he said.
Median rent
Median mortgage
Humble Atascocita Houston metro
Harris County
SOURCE: HOUSTON ASSOCIATION OF REALTORS/COMMUNITY IMPACT
first quarter of this year. Median monthly mortgage payments in the first quarter were $2,060 in Humble and $2,560 in Atascocita, according to HAR—about 3.5% and 19.6% higher than the median base apartment rents for those areas, respectively.
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LAKE HOUSTON - HUMBLE - KINGWOOD EDITION
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