After a Brief Valley, Houston Supply Volumes Could Return

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Houston’s supply volumes declined in the past two years, but – pandemic notwithstanding – new additions could start to increase again soon. During the economic cycle that began in early 2010, Houston averaged a little over 11,200 new units annually. However, since hitting the recent peak of over 23,000 units in early 2017, annual delivery volumes have come down steadily. In 2nd quarter 2018, annual supply started undercutting the cycle average, bottoming out at just under 5,500 units in 2nd quarter 2019. In the year-ending 1st quarter 2020, roughly 9,570 units were completed, well below Houston’s long-term norms. Though construction delays due to the COVID-19 pandemic will likely push some deliveries out, scheduled supply is expected to increase in the near term, and should reach ahead of the cycle average once again before long.