Rental properties in Killeen, Texas, are changing in 2025 due to local economics, demographics, and market conditions. Tied to Fort Hood, Killeen's rental market remains strong, with median rents around $1,300 for various property types in August 2025. This is about 35% below the national average, but prices are expected to rise due to high demand and limited supply. Investors, landlords, and renters need to understand these trends to make informed decisions.
Military Presence and Demand
Fort Hood drives steady demand for rental properties in Killeen, Texas. The base supports thousands of personnel, many choosing rentals due to frequent relocations. This keeps vacancies low, and owners prefer renting over selling in a high-interest environment. For 2025, rent growth in the Killeen-Temple area is projected at about 1.9%, driven by military families seeking affordable, temporary housing.
Population Growth and Economic Expansion
Killeen's growing population and job increases in defense, healthcare, and education push rental prices higher. This growth worsens housing shortages, as new construction lags behind demand. Statewide challenges, like limited new inventory and higher construction costs from inflation and insurance, amplify this. In 2025, slight home price increases are expected, making renting more common as home-buying becomes less affordable.
Supply Constraints and Building Costs
Limited supply and rising costs for materials and labor raise rents in Killeen. Developers face challenges that slow new projects, keeping pressure on existing units. This scarcity supports price increases, consistent with statewide rent growth trends.
Impact of Interest Rates and Insurance
High interest rates discourage home purchases, creating a renter-focused market that allows landlords to increase prices. In Killeen, average rents are $1,275, reflecting this shift, while rising insurance costs add to expenses passed to tenants.
Cap Rates and Investor Interest
Cap rates for multifamily properties in early 2025 range from 4.84% to 6.71%, showing strong investor interest. Areas near the base or growing suburbs draw investment in single-family and apartment rentals.
Jim Wright Company
For rental property expertise in Killeen, the Jim Wright Company stands out. Founded in 1974, it specializes in property management and rentals, serving over 4,000 tenants and owners annually, mainly military clients. The firm manages over 2,000 residential units, offering leasing, maintenance, and market advice to improve returns in this competitive market.
Final Words!
Military demand, population growth, supply limits, and economic factors will likely increase the prices of rental properties in Killeen, Texas, in 2025. Tracking these trends will help guide decisions.
