Today we’re looking at the Houston multifamily market, and in particular, the pressure that is building in the middle of the market. We are talking about Houston specifically. But you can take the lessons from Houston and apply them to other markets in the US and probably elsewhere.

When people talk about apartment fundamentals, they often speak in broad averages. Occupancy is up. Rent is down. Absorption is positive. Cap rates are stable. But averages can hide a lot of insights.

The latest Q1 2026 multifamily report from Colliers shows Houston sitting at 90.4 percent occupancy. That number was unchanged from the prior quarter, and it was actually up from 88.6 percent a year earlier. On the surface, that sounds reasonably healthy.

But when you look under the hood, the story becomes more nuanced.

Houston delivered 6,469 new apartment units in the first quarter. That is a big number. At the same time, the market absorbed 3,578 units. So demand was positive, but it did not keep pace with new supply. That is the first warning sign.

Now, supply and demand do not affect every property the same way. The Colliers data shows that Class A properties absorbed 3,246 units in the quarter. Class C properties absorbed 678 units. Even Class D had positive absorption of 413 units.

But Class B properties recorded negative absorption of 759 units.

That is the story.

Class B is getting squeezed from both directions.

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