The Impact (7-13-3, 24 points) started brightly, but fell behind in the seventh minute and couldn't come back.
Montreal head coach Jesse Marsch said it hurt giving up the first goal after controlling the first six minutes and missing several chances in that span, but added that he was impressed with his team's resilience after falling behind.
"For me, the way we pushed the game in the second half until it was 2-0, was very good and showed we had character," said Marsch. "We are a bit unlucky now not to come out with a point."
Montreal falls to 7-13-3, seventh in the Eastern Conference on 24 points, while Houston improves to 9-5-7 and moves into third in the West with 34 points.
Houston took a 1-0 lead in the seventh minute as striker Macoumba Kandji scored the first of his two goals, picking up his own rebound and taking a shot that bounced off goalkeeper Donovan Ricketts and defender Zarek Valentin before dribbling just inside the far post.
It was Kandji's first two-goal game since October 2009, when he was playing for New York.
The goal came moments after Montreal midfielder Lamar Neagle put a header off the far post in the second minute and midfielder Davy Arnaud sent a shot wide left two minutes later.
"First five minutes of the game, and if that goes in, it is a completely different game," Neagle said. "If either of the chances goes in, it is a different game. Those are ones you want back."
Kandji had a chance to put the Dynamo up 2-0 in the 65th minute, after heading a through ball past Ricketts for a breakaway, but defender Shavar Thomas ran him down in front of the net and made a goal-saving tackle to keep it 1-0.
However, defender Bobby Boswell extended Houston’s lead in the 84th minute with a header off a Brad Davis corner. Kandji made it 3-0 five minutes later, sending a shot inside the near post from the upper left box.
"At this moment, we are not consistent," Thomas said. "Even most of the games we lost, we are in it for 80 to 85 minutes and then we make a mistake on a set piece and we go and shoot ourselves in the leg."
But Thomas said Montreal is learning from these mistakes.
"I know when it is going to matter most, we are going to pull through," he said. "We are learning very quickly."
Montreal continued to have chances, but midfielder Sanna Nyassi missed wide left in the 79th minute, and midfielder Hassoun Camara had his shot in second half stoppage saved by Houston goalkeeper Tally Hall.
The Impact also lost Valentin in the first half with a left ankle sprain. Karl Ouimette got his bit of action, subbing in for the injured Valentin in the 26th minute.
Montreal dropped its second of three games in the past week, and its fifth game of the last seven. Marsch said the travel and the heat — it was 32 degrees at kickoff — made things difficult Saturday night.
"We came in here and put everything we could in to it," Marsch said. "Giving up a goal early is always tough on the road. I think our team pushed this game pretty well, and I don’t think the scoreline is accurate to what the game looked like."