After two years of elevated home prices in Houston, prices began to decrease for the first time in February, according to a June 14 report from the Houston Association of Realtors. However, the average price for single-family homes—$393,651, as of April—in three market areas that make up the Spring and Klein communities remains 60% higher than the average price in April 2019, according to the Texas Real Estate Research Center.
“Unfortunately, there still are looming influences [on the housing market] out there that remain out of our control, including interest rates, a possible deepening of inflation or a drift toward recession,” HAR Chair Cathy Treviño said in the report.
Price uncertainty on single-family homes has led to an increase in demand for rental housing, according to a June 21 report from HAR. The average rent price for single-family homes in Houston—$2,255 per month—only rose by 0.67% since May 2022; however, it remains 20.3% higher than in May 2019.
Local families are struggling with the cost of their mortgages and rent, said Brian Carr, chief advancement officer for Spring-area nonprofit Northwest Assistance Ministries. More than 300 families applied for rent and mortgage assistance through NAM during the first week of June when typically, Carr said, the nonprofit sees 110 requests per week.
“The economic hardships that these families were seeing ... even continued to worsen after the pandemic,” Carr said. “So these families are really going through a three-year—going on four-year—added struggle to what their life already was.”
Rental demand surges
Hikes in mortgage interest rates have been a “major deterrent” to homebuying in Houston and across the U.S. beginning in late 2022, according to the June 14 HAR report.
Local real estate agents said the increase in interest rates to above 6% for a 30-year mortgage—which occurred in September for the first time since 2008, according to Freddie Mac data—may have caused prospective homebuyers to hold off on purchases.
Sales for single-family homes in the Spring area decreased about 45% year over year as of April, according to the Texas Real Estate Research Center. Compared to April 2021, home sales dropped by about 50%.
Meanwhile, demand for rental homes, townhomes and condominiums spiked by an average of 19% year-over-year for May in the Greater Houston area, according to HAR.
Holly Davis has lived in the Spring area since the 1980s, she said. A homeowner for decades, Davis became a renter for the first time about 2 1/2 years ago.
“Prices ... got so high for a while it was almost the same to rent or buy, but now home prices are settling again,” Davis said.
A May 19 analysis from Redfin, a real estate firm, shows Houston is one of the four major metros nationwide where buying a typical home is more affordable than renting one. The analysis cited a lower cost of living and lower property values compared to other cities.
Tara Lightsey has lived in an apartment near the intersection of FM 2920 and Kuykendahl Road in Spring since September after selling her home. Lightsey said she was able to make a profit selling her Cypresswood Glen neighborhood home, but she has been paying about $800 per month more in rent than she was for her mortgage.
“I think [high home and rent prices are] pushing a lot of people out of Spring and into areas where they probably don’t feel as safe because they just can’t afford it here now,” Lightsey said.
Proposing affordable housing
About 12%—or 45,061 residents—living in the nine ZIP codes comprising the Spring and Klein communities live below the poverty level, according to the U.S. Census Bureau’s Annual Community Survey’s 2021 five-year estimates. To aid low-income residents living in the Spring area, two developers hope to provide affordable living options.
Lincoln Avenue Capital has plans to open a senior affordable housing complex called Oakwood Trails by the first quarter of 2026, according to a July 12 email from the developer. The project will be located near Louetta Road and Dover Mills Drive in Spring.
Meanwhile, Pedcor Investments is planning Willow Creek Manor— an affordable housing project to be located at Hufsmith-Kohrville and Cossey roads.
Pedcor opted not to comment on the project.
LAC has been open to hearing concerns and changing aspects of the project to put the community at ease, according to a February newsletter from state Rep. Sam Harless, R-Spring. Developers reduced the number of apartments in the complex from 254 to 203, lowered some of its buildings by a story and limited the age of residents to 62 and older. Construction on the complex is slated to begin in the first quarter of 2024.
To encourage developers to build affordable housing, the state offers the Housing Tax Credit Program, which gives companies building such projects a reduction in their federal taxes, according to the Texas Department of Housing and Community Affairs’ website. The two types of program tax credits are 9% and 4%, which have different requirements and tax offsets. LAC’s project is a 4% tax credit application, according to Harless’ newsletter.
Affordable housing projects are not viewed positively by all Spring-area residents and representatives, however. State Rep. Valoree Swanson, R-Spring, has worked to stop all applications for 9% housing projects in her district, she said in a June 22 statement.
“While the goal of providing affordable housing is laudable, the government should not hurt local property values and provide sweetheart deals to luxury apartment complexes at the expense of taxpayers,” Swanson said in the statement.
Some proposed affordable housing projects for Spring have been canceled. In March, KCG Companies opted not to pursue an unnamed 60-unit apartment project after expected state housing tax credit funding fell through, said CJ Linter, vice president of development. The project was slated for Schroeder Road and Middlebury Lane.
“We view the affordable housing program ... as a critical building block and steppingstone for people moving through their own career journeys and life journeys and making sure people have a good place to be in their community,” Linter said.
In January 2022, LDG Development canceled plans for the Greenfield Apartments, a 304-unit affordable housing project that would have been built at Brandt and Spring Cypress roads, as previously reported by Community Impact. The company has no plans to pursue another project in the area due to “local stakeholders not supporting affordable housing,” Justin Hartz, executive director of development, said in a June 22 email.
Finding solutions
Treviño said many consumers in the market are unaware of help that may be available to them. The Houston Association of Realtors’ website shows 34 assistance programs available in the Spring area.
To help struggling residents, NAM offers programs such as mortgage and rent assistance and “indefinite stay” housing for families experiencing homelessness, according to the organization’s website.
There isn’t one simple solution to the housing problems Spring-area residents are facing, Carr said—the approach must be comprehensive.
“We need more quality, affordable housing for these families. ... We need landlords and apartment owners to ... not be so quick to raise rent on these families,” Carr said.
Dave Manning contributed to this report.
