According to a new report, rental rates across the nation are on the rise and the main driver centers around the home market. With younger demographics the primary group of today’s potential home buyers, studies show there is a dip in the home ownership rate for these generations when compared to their predecessors. Many economic factors have contributed to this, including the fluctuations and current climate of the housing industry as the main issue.
Larger and more consistent increases have been seen in the market over the last decade that when compared to historical data from the early 2000’s has had a faster and more substantial growth rate. These increases in home values have grown a staggering 70% nationally when comparing the median price of homes in the current market against those in the 2008 recession lows. Today’s home prices have now put many potential buyers in a position unable to make the financial commitment and has made a larger group of the population look to rental alternatives.
“The rental market has been a solution for a growing population of residents in Texas and in the nation, who may seek home ownership but cannot afford it. Because of this trend, more rental properties are being developed across the state to keep up with the demand.” shares Texas-based property developer and CEO of Western Rim Properties Marcus Hiles.
Though it is getting even harder for developers to keep up with the growing demand. Reports from April 2019 show that rents rose by 3% year over year nationally with key locations pushing the rise. Those locations include Texas’ popular metro areas including Houston, Austin and Dallas. Among the fastest growing in rental rates was Austin with a 3.5% annual increase that was followed by the DFW area at 2.5%. Despite these increases in rental rates, residents are still looking for housing alternatives. Studies show that even though the market is starting to balance out, home prices remain high in some of the nation’s top metro areas including popular Texas cities.
As the home market continues to grow in value the younger generations that are the majority of potential buyers are choosing rental options. Reports show that 65% of households run by those under the age of 35 rent which is up nearly 10% from a decade ago. “As the housing market is not seeing relief in certain areas in Texas, rental properties are growing to supplement the need. Despite increases in rent that some locations may be experiencing, the state continues to attract new residents each year as it remains home to some of the most affordable living options available.” shares Marcus Hiles who has established several rental properties across the midwest state throughout his 30-year career.
The housing market is expected to level soon but there is no telling how each area with be impacted and when. Until the changes occur, property developers and potential home buyers are having to adapt with new alternatives and the solution points to rental properties in the short term.