renter's market
Houston sees biggest increase in nation among families who rent instead of own
While Houston is clearly one of the most affordable cities in the country when it comes to cost of living and quality of life, there’s one place where life in the Bayou City might be coming up a bit short, according to one study: the soaring prices and shortage of entry-level, single-family homes.
The Houston metro ranks first nationally when it comes to the net change in renters with children. In the 10 years between 2006 and 2016, an increase of 107,000 households were renting instead of owning. Dallas-Fort Worth comes in second; 101,000 more families were renting rather than owning during the same time period.
Nationally, in the decade between 2006 and 2016, the drop in the number of families with children who own their home has reached almost 3.6 million, while the same demographic living in rentals has increased by 1.9 million.
Texas isn’t alone in the trend. This study, released by real estate blog Rent Café, shows that families with children who are renting apartments is on the rise in the 30 largest U.S. metros, while ownership is declining.
The issue is simple supply and demand — and there isn’t enough supply on the single-family home side to satisfy the demand. Increasing prices in single family homes have put them out of reach for many, especially those looking for a first — or entry-level — home.
In Houston, single-family home prices increased by 30 percent in the last five years, while rents have risen by 25 percent. In DFW, these changes are 45 percent vs. 31 percent, respectively. That means potential home owners find themselves apartment hunting instead.
Since 2006, 1.1 million new apartments were built nationally. In Houston, 45 percent of new apartments built over the last dozen years were classified as family-sized (two or more bedrooms); in Dallas, that percentage is 42 percent.
A number of factors have contributed to families having to reassess or put the American dream on hold. In addition to the numbers game of available housing stock at prices buyers can afford, there are also tighter lending rules, putting the kibosh on some families’ plans. Additionally, some of those renters may have been families who lost their homes in the wake of the recession and they’ve not been able to climb back on the property owning ladder. Meanwhile, single-family home prices have shot up 75 percent faster than rental rates over the last five years.
A rendering illustrates one of the building's penthouses.Rendering courtesy of Shimahara Visual