After free agency opened, ESPN's Adrian Wojnarowski reported that Paul will re-sign with the Rockets on a four-year deal worth $160 million, while Shams Charania of Yahoo Sports reported Trevor Ariza will leave the Rockets for the Phoenix Suns.
Wojnarowski later reported the Rockets will meet with Capela in Los Angeles on Sunday. The Rockets can match any offer made to Capela, as he is a restricted free agent.
Stein added that the Rockets are now "scarcely even mentioned" as a potential free-agent destination for LeBron James.
James opting out of the final year of his contract with the Cleveland Cavaliers essentially eliminated the Rockets from contention since they do not have the salary-cap space needed to accommodate him.
With a centerpiece of James Harden, Paul and Capela, the Rockets fell one win short of reaching the NBA Finals last season.
If not for CP3 missing the final two games of the Western Conference Finals with a hamstring injury, Houston may have defeated the Golden State Warriors and faced the Cavs for a championship.
The 33-year-old Paul was traded from the Los Angeles Clippers to the Rockets last offseason, and in his first campaign with the Rockets, he averaged 18.6 points, 7.9 assists and 5.4 rebounds in 58 games.
Paul then put up 21.1 points, 5.8 assists and 5.9 rebounds per contest during the playoffs.
Capela, meanwhile, continued his ascent last season after breaking out in 2016-17.
The 24-year-old Switzerland native had an NBA-best field-goal success rate of 65.2 percent while averaging 13.9 points, 10.8 rebounds and 1.9 blocks per game.
Capela benefited from Paul's arrival, as he played a role similar to what DeAndre Jordan did with Paul in L.A.
Last season, the Rockets were the No. 1 seed in the Western Conference, and they finished with the NBA's best record at 65-17.
Re-signing Paul and Capela wouldn't allow them to add much to their roster aside from using their exceptions, but that core three along with the likes of Eric Gordon and PJ Tucker would be enough to make Houston one of the league's best teams again in 2018-19.
Whether it's enough to emerge from the stacked Western Conference may depend on whether the Rockets' key players are able to stay healthy throughout the regular season and playoffs.