KATY, TX (Covering Katy News) — The build-to-rent real estate trend is growing in the Katy area as high-interest rates make home purchasing more difficult for some traditional new-home buyers.
"The driving force remains ongoing concerns about housing affordability and elevated mortgage interest rates," said the Houston Association of Realtors in a statement.
Greystar is constructing its first built-to-rent community at Sunterra at Pitts and Clay roads in the Katy area. It's building 156 new-construction rental homes alongside new homes that are for sale.
The new construction for sale homes are more upscale looking than the rental homes, and they are in a different neighborhood, but they are all in the same subdivision. The photo gallery below shows a house that is for rent, and a house that is for sale in Sunterra.
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A rental home at Sunterra.
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A home that is for sale in Sunterra.
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A real estate sign at Sunterra advertising new construction homes for sale and for rent.
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The entrance to Sunterra.
According to RCLCO Real Estate Consulting, Sunterra is the third best-selling, master-planned community nationally. In 2023, it experienced a 49-percent increase in sales yearly, totaling 669 units sold in the 2,300-acre community.
Sunterra is not the only development on Houston's west side experiencing this dramatic market change. In the summer of 2022, Howard Hughes Holdings announced it would add 263 new-construction rental units to its Bridgeland master-planned community in Cypress.
According to RentCafe.com, the Houston region ranks third among U.S. metro areas with the most single-family rental units under construction. Phoenix leads the way with more than 5,400 units, Dallas has nearly 4,000 units, and Houston has over 2,500 units.
“The one trend that has been consistently strong across greater Houston throughout 2023 is demand for single-family rental homes,” said Houston Association of Realtors Chairperson Cathy Treviño. “The rental market will likely remain strong until consumers feel confident about returning to the resale market if and when interest rates ease and pricing hits what they consider their sweet spot.”
HAR's August 2023 Rental Market Update revealed that leases of single-family homes rose 12 percent year over year, with the average lease increasing 1.5 percent to $2,344, the second-highest ever.
A total of 4,096 leases were signed compared to 3,656 in August 2022. That is the third-highest volume of single-family leasing on record.
The Washington, D.C.-based National Multifamily Housing Council is promoting the build-to-rent concept. Grey Star agreed to support NMHC's six core principles for professionally managed rental properties. Those principals are:
- Engage with residents to foster an atmosphere of mutual respect, trust, and communication
- Have procedures in place to respond to resident requests
- Comply with all applicable anti-discrimination, fair housing, and fair credit laws
- Support residents who express an interest in enhancing their credit through rent payment reporting
- Respond to requests from residents facing financial hardship who are seeking external resources
- The rights and responsibilities of leaseholder and housing providers will be contained in the lease documents
“It was a privilege to be one of the founding members of the NMHC committee that developed these core principles,” said Michael Clow, executive director of real estate at Greystar. “We are thrilled to be the largest housing provider in the U.S. supporting NMHC’s Foundation for Rental Housing.”