In corresponding roster moves, Carter-Williams and MarsShon Brooks were waived by the Bulls.
ESPN's Adrian Wojnarowski first reported the news, noting the Rockets made the deal to avoid Carter-Williams' contract guarantee for the season. Houston would have had to guarantee the remaining money on his deal at 5 p.m. ET Monday.
Carter-Williams averaged 4.3 points and 1.3 assists in 16 games with the Rockets. He began the season as part of the rotation but has sat 13 of the past 14 games.
It's highly unlikely the draft pick will convey since it is heavily protected, according to Wojnarowski. The deal was likely structured to be a straight cash dump on the Rockets' part. The Bulls get cash considerations for taking on a cap hit while never actually paying out any money, while the Rockets avoid having Carter-Williams' number added to their tax.
Bobby Marks of ESPN broke down the financial implications:
Houston needed to make a roster spot available for Danuel House Jr., who is playing on a two-way contract. House has emerged as an integral part of the rotation, knocking down threes at a 36.5 percent clip and playing solid defense on the perimeter.
A two-way player can only be on an NBA roster for 45 days before his contract needs to be converted. House is brushing up against that number and is certain to receive an NBA deal for at least the remainder of this season.
As for Carter-Williams, it's possible this is the end of his NBA journey. Named the 2013-14 Rookie of the Year, MCW has had one of the most precipitous falls for a player in recent memory not caused by an injury. His inability to shoot the basketball has become a major issue as teams increasingly emphasize spacing, and the Syracuse product never became the defender many projected.
A team may wind up bringing him in, but it's not clear what positives he brings to the table at this juncture.