Cap Rate in Houston, TX

2026 Market Overview for Real Estate Investors

Avg Cap Rate

6.3%

#24 of 50 markets

Median Home Price

$265,000

Purchase price

Median Monthly Rent

$1,500

$18,000/yr gross

Rent-to-Price Ratio

0.57%

Moderate

Cap Rate Rating

Good

Strong return relative to market norms. Common in cash-flow-focused markets in the Midwest and South.

Market Snapshot

Population	2,304,580
5-Year Population Growth	+5.2%
Median Household Income	$56,000
Vacancy Rate	8.0%
Property Tax Rate	2.03%($5,380/yr)

Investor Takeaway

Houston offers massive scale and diversity across neighborhoods but watch for flood zone exposure and high property taxes. The energy sector recovery has boosted job growth and rental demand.

Quick Math

Estimated annual numbers for a median-priced property in Houston, TX before financing:

Annual Gross Rent$18,000

Less Vacancy (8.0%)($1,440)

Less Property Tax (2.03%)($5,380)

Less Est. Insurance + Maintenance($5,300)

Estimated NOI$5,881

Implied Cap Rate2.2%

Estimates based on median values. Insurance + maintenance estimated at 2% of home value. Actual results vary by property condition, neighborhood, and management.